On July 1, 2025, the U.S. Senate passed an amended version of the Republican tax bill known as “The One Big Beautiful Bill.”  While the final details are still being finalized, we want to share a summary of the key provisions that may be relevant to our clients, especially those with U.S. tax exposure or cross-border interests. 

What’s Changing? 

The bill builds on the 2017 Tax Cuts and Jobs Act, making many of its temporary provisions permanent. Here are the highlights: 

For Individuals 

  • Tax Brackets: The current personal income tax brackets will remain in place permanently. The top rate stays at 37% (instead of increasing to 39.6%). 
  • Standard Deduction:  The increased standard deduction is now permanent. 
  • State and Local Tax (“SALT”) Deduction Cap: The cap on state and local tax deductions increases to $40,000 for 2025–2029, with small annual increases. However, this benefit phases out for high-income earners (over $500,000 in income). 
  • Exclusion for Tips and Overtime: 
    • Up to $25,000 in qualified tips can be excluded from taxable income. 
    • Up to $12,500 in qualified overtime pay can also be excluded. 
    • These exclusions phase out for individuals earning over $150,000 ($300,000 for joint filers). 

For Business Owners and Investors 

  • Qualified Business Income Deduction: The 20% deduction for eligible income from partnerships and certain LLCs is now permanent. 
  • Bonus Depreciation: Businesses can permanently deduct 100% of the cost of short-lived assets acquired after January 19, 2025. 
  • Research & Development (“R&D”) Expenses:  Immediate expensing of domestic research and development costs is restored permanently starting in 2025. 

Estate and Gift Tax 

  • The exemption amount increases to $15 million (indexed for inflation) and will not drop as previously scheduled. 

International Tax 

  • The current GILTI (Global Intangible Low-Taxed Income) rules are made permanent, though renamed as “net CFC tested income” rules. 

What’s Not Included? 

A controversial provision—IRC §899, also known as the “revenge tax”—was removed from the final version of the bill. This section would have imposed penalties on countries (like Canada) that apply certain taxes to U.S. companies. 

In response to the original proposal, Canada announced it would withdraw its Digital Services Tax (DST), signaling a move toward a broader trade agreement with the U.S. The removal of IRC §899 and Canada’s reversal of the DST are both positive developments for cross-border business and tax planning. 

What This Means for You 

Most of the changes in this bill are focused on U.S. domestic tax policy. However, if you are a U.S. citizen living in Canada, a Canadian doing business in the U.S., or have cross-border investments, some of these provisions may affect your tax planning. 

We are monitoring the situation closely and will provide further updates as more details become available. 

Questions? 

If you have any questions about how these changes may impact your personal or business tax situation, please don’t hesitate to reach out to your RLB advisor.