June 25, 2025

Stay ahead with an expert breakdown of the Senate and House tax plans under the “One Big Beautiful Bill.” Key provisions, differences, and actionable insights for business owners, HNW families, and legacy clients.

Congress is working at breakneck speed to pass the “One Big Beautiful Bill” (OBBB) by July 4th, merging tax cuts and spending reforms. With both Senate and House drafts circulating, clients—especially business owners, high-net-worth families, and post-liquidity event individuals—are seeking clarity. Here’s a strategic breakdown to confidently guide planning conversations.

Where We Stand in the Process

• Senate version passed Finance Committee; House has its own text.
• They will enter Conference Committee to merge differences, then be re-voted in both chambers before heading to the President.
• While on track, significant variance (especially on SALT, Medicaid, clean energy) could delay passage.

Consensus Provisions Likely to Stick

These popular elements are in both versions and expected to survive the reconciliation:

• Permanent retention of current tax rates.
• Elimination of personal exemptions.
• $15 million inflation-adjusted gift and estate tax exemption from 2026.
• Pease limitation repeal.
• “Trump Accounts” pilot: $1,000 savings per child born 2025–2028.
• Broader eligible expenses for 529 plans (e.g., K–12, credentialing).
• Temporary (2025–2028) auto loan interest deduction.
• Boosted Section 179 deduction ($2.5M) and threshold for phase-out ($4M).

Areas with Minor Differences

Both drafts agree in principle but vary on details—likely to be reconciled without derailment:

• Standard deduction remains doubled; House adds a further temporary boost.
• Itemized deduction limitation at 35% value; House curtails SALT benefit to 32%.
• Child Tax Credit (CTC): House offers $2,500 (2025–2028 then $2,000), Senate offers permanent $2,200.
• Tip and overtime deductions: temporary through 2028; Senate limits to $25K/$12.5K with phase-outs, while House allows uncapped amounts.
• Bonus depreciation: House extends through 2028; Senate makes it permanent.

Major Points of Clash

SALT Deduction Cap

• Senate: Retains current $10K cap, but proposes relief for PTET owners via passthrough entity taxes.
• House: Increases cap to $40K (phased for high earners) and excludes specified service business owners.

Qualified Business Income (QBI) Deduction

• Senate: Keeps 20%, moderately raises phase-out thresholds for service businesses.
• House: Increases to 23%, with a more taxpayer-friendly phase-out and includes BDC dividends.

Charitable Giving Rules

• House: Reinstates up to $150/$300 non-itemizer deduction temporarily (2028); AGI limit for itemizers down to 50%.
• Senate: Permanently allows up to $1,000/$2,000 non-itemizer deduction, keeps 60% cash contribution AGI cap, but introduces 0.5% floor.

Strategic Takeaways for Clients

• High-net-worth or SALT-heavy clients: Stay alert to SALT cap negotiations; outcomes can significantly affect tax liability.
• Professional services business owners: QBI differences could impact after-tax cash flow profoundly—anticipate and model scenarios.
• Charitably inclined individuals: The Senate’s more generous non-itemizer and charitable deductions could benefit those who give without itemizing.
• Families with children: CTC amounts are higher in both, so review updates to benefit strategies through 2028.

Planning Now vs. Later

Although many changes won’t take effect until 2026, some are retroactive (e.g., bonus depreciation since Jan 2025). Advise clients to:

• Defer or accelerate certain expenditures depending on deduction timing.
• Model multiple scenarios, especially around itemized versus standard deductions.
• Reassess charitable giving strategies aligned with the finalized CTC and above-the-line rules.

What’s Next

Passage may still hinge on SALT and Medicaid concessions, rural hospital reactions, and deficit-critical senators. A near-final version is likely before July 4, but timing will depend on internal GOP alignment and pressure from affected states.

Invite to Act

When the final version is signed, our team will publish detailed guidance and host client webinars. For now:

• Schedule a strategy session with Omni 360 Advisors if you’re a business owner or managing post-liquidity changes.
• Book an estate/legacy planning review with Omni Legacy Law—especially valuable before the 2026 gift/estate exemption resets.

Stay ahead of Washington—and keep your clients ahead of the curve.

Prepared by Neel Shah’s team—expert, approachable, and ready when you need us.

Attribution: This analysis is based on updates provided by Jeffrey Levine, CPA/PFS, CFP®, AIF®, CWS®, BFA, ChFC, RICP, Chief Planning Officer, and Focus Partners Advisor Solutions.