On May 22, the U.S. House of Representatives passed a bold new tax reform bill—dubbed “The One Big Beautiful Bill”—which could reshape the financial future for millions of Americans. While its fate in the Senate remains uncertain, this sweeping legislation is already causing waves across the tax landscape.
Whether you’re a small business owner, a high-net-worth individual, or someone just trying to make sense of your deductions, JS Morlu is here to break down what this bill could mean for your 2025 tax season.
What’s in the Bill: Highlights That Matter
Let’s dig into what this bill proposes—and what’s missing.
According to the House Ways and Means Committee, the bill seeks to extend and solidify key aspects of the 2017 Tax Cuts and Jobs Act (TCJA). Here are the major components:
- Permanent Lower Individual Tax Brackets – Keeps the current reduced rates from the TCJA.
- Expanded Standard Deduction – Continues the higher standard deduction, offering more relief to taxpayers.
- Extended Child Tax Credit – While not as generous as the temporary 2021 expansion, it still provides crucial support to families.
- Permanent 20% Deduction for Pass-Through Income – Also known as Section 199A, this is a big win for small business owners and partnerships.
- Relaxed SALT Cap – Modifies the controversial $10,000 cap on state and local tax deductions, benefiting residents in high-tax states.
And what’s notably absent? No increases in corporate tax rates, no changes to capital gains, and no adjustment to estate tax thresholds. However, this entire package comes with a hefty price tag—$4.5 trillion over a decade, per the Congressional Budget Office.
What This Means for You: Breaking It Down by Audience
At JS Morlu, we tailor our insights to your financial reality. Here’s what this bill could mean depending on your situation:
Small Business Owners
If you’re running a business or a partnership, the Section 199A deduction being made permanent is a significant win. You’ll continue to deduct up to 20% of qualified business income, which has proven to boost cash flow and reinvestment potential. For many of our clients in government contracting and professional services, this could mean thousands in annual tax savings.
High-Net-Worth Individuals
You’re likely benefiting from lower individual rates and broader deductions. The continued standard deduction and relief on the SALT cap (especially if you live in Northern Virginia or D.C. suburbs) could provide meaningful savings. However, critics argue that these cuts are skewed toward top earners—which means proactive tax planning is more important than ever.
Home Healthcare Providers & Nonprofits
While the bill doesn’t directly address industry-specific challenges, maintaining favorable income brackets and deductions can help preserve cash flow. If you rely on grants or operate with thin margins, any relief on the tax front can bolster sustainability.
A Political Cliffhanger: What Happens in the Senate?
Here’s the catch—the Senate is a battlefield. While House Republicans are united, Senate Democrats are less than enthusiastic. Some moderates are open to negotiation (especially around SALT deductions), but the bill faces an uphill battle. To pass, it needs 60 votes, requiring bipartisan support.
Expect plenty of horse-trading and amendments before anything final lands on the President’s desk.
Planning Ahead: Why This Matters for the 2025 Filing Season
Most provisions from the original TCJA expire in 2025. Without this bill or a similar replacement, you could face:
- Increased individual income tax rates
- Reduced standard deductions
- Elimination of the pass-through deduction
- Higher tax burdens across the board
At JS Morlu, we recommend starting your 2025 tax strategy now. This is especially true if you’re managing wealth, overseeing a business, or operating in a heavily regulated industry like government contracting or healthcare.
Our Take: Cautious Optimism, Strategic Preparation
Chairman Jason Smith calls the bill a “win for every American who wants to keep more of what they earn.” And while that may be true for many, the lack of offsets makes long-term fiscal health a question mark. Maya MacGuineas of the Committee for a Responsible Federal Budget warns this could deepen the deficit—setting the stage for future tax hikes or program cuts.
So what’s our advice?
Don’t wait for Congress to decide your fate. Take control of your tax plan today.
Let JS Morlu Guide Your 2025 Tax Strategy
We don’t just prepare returns—we build tax strategies that last. With decades of experience advising small businesses, high-net-worth individuals, nonprofits, and government contractors, JS Morlu is your strategic partner in tax, audit, and advisory services.
