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In May 2025, Representative Smith of Missouri introduced an amendment known as “The One, Big, Beautiful Bill,” a sweeping tax reform package designed to provide long-term tax relief for American families and businesses. The proposal builds on, and permanently extends, many key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), while introducing new deductions aimed at rewarding work and stimulating the economy.
At the core of the bill is the permanent extension of individual tax rate reductions. Without this legislation, these lower rates were set to expire after 2025. The bill ensures that the existing brackets remain in place, providing stability for taxpayers. It also keeps the expanded standard deduction and eliminates personal exemptions, thereby simplifying tax filing for millions of Americans.
A notable family-focused enhancement is the increase and extension of the child tax credit. The credit rises to $2,500 per child for tax years 2025 through 2028 and remains at $2,000 per child thereafter, with built-in inflation adjustments. Additionally, strict Social Security number requirements were added to minimize fraud.
For business owners and pass-through entities, the bill makes the 20% Qualified Business Income (QBI) deduction permanent and increases it to 23%. This is a significant benefit for small businesses, allowing them to retain more earnings for reinvestment and growth. The bill also introduces deductions for certain dividends paid by Business Development Companies (BDCs), further supporting investment activity.
Another critical feature is the retroactive reinstatement of full expensing for domestic research and experimental (R&D) expenditures, applying back to tax years beginning after December 31, 2021 and through the end of 2029. This move reverses the unpopular TCJA rule requiring five-year amortization of R&D costs. It allows businesses to immediately deduct their U.S.-based research expenses, improving cash flow and incentivizing innovation.
Estate planning is also addressed, with the estate and gift tax exemption more than tripled to $15 million starting in 2026. This change ensures that more family businesses and farms can be passed down without triggering significant estate tax liabilities.
The bill includes several new deductions aimed at frontline workers. A deduction for tips and overtime pay is introduced for 2025 through 2028, reducing the taxable income of workers in tipped occupations and those earning mandated overtime. Seniors benefit from a temporary $4,000 additional standard deduction, phased out for high earners.
Other key provisions of “The One, Big, Beautiful Bill” offer targeted relief and certainty across a range of tax areas. The bill continues the current limits on the mortgage interest deduction, restricting the deduction to interest on up to $750,000 of acquisition debt for loans taken after 2017. It also extends the limitation on casualty loss deductions, allowing claims only for losses in federally declared disaster areas. The bill enhances ABLE account benefits, maintaining expanded contribution limits to support individuals with disabilities and their families. It makes permanent the exclusion from gross income of student loans discharged due to death or permanent disability, providing crucial relief to affected families. Finally, the bill expands the military tax exclusion for hazardous duty pay to include service members in Kenya, Mali, Burkina Faso, and Chad, recognizing the risks faced by deployed U.S. Armed Forces personnel.
Importantly, the bill strengthens compliance by introducing new reporting requirements and Social Security number verification for various credits and deductions.Overall, “The One, Big, Beautiful Bill” represents a major shift toward tax policy predictability, workforce rewards, and economic stimulus. By locking in popular TCJA provisions and adding targeted relief for workers, families, and businesses, it aims to simplify the tax code and promote prosperity. The bill’s retroactive application to R&D deductions, in particular, offers immediate value to businesses investing in U.S. innovation.