Tax insight

President Trump signs H.R. 1, the “One Big Beautiful Bill Act”

Insight
5 minute read
July 06, 2025

What happened?

President Donald J. Trump on July 4 signed into law H.R. 1, the “One Big Beautiful Bill Act.” The bill was passed by the House on July 3 by vote of 218 to 214. The bill was passed by the Senate on July 1 by a vote of 51 to 50, with the tie-breaking vote of Vice President JD Vance.

H.R. 1 contains significant tax law changes with various effective dates affecting individual and business taxpayers, including some provisions with effective dates tied to the bill’s July 4 date of enactment.

Key tax provisions featured in H.R. 1 include:

Permanent extension, with modifications, of individual, business, and international tax provisions enacted as part of the 2017 TCJA that were set to change at the end of 2025.
Modified versions of individual and business tax relief proposals advanced by President Trump, and other new tax relief measures, including a temporary increase in the cap on individual itemized deductions for state and local taxes to $40,000 for tax years 2025 through 2029.
New or modified incentives for business investment and certain Inflation Reduction Act (IRA) clean energy tax credits with various effective dates, including some provisions with begin-construction date and placed-in-service date requirements.
Various limits on business and individual tax deductions, which are intended to offset part of the cost of the legislation.

In addition to significant tax law changes, the bill approved by Congress includes increased funding for immigration control and national defense, and spending reductions affecting Medicaid and other federal programs. The bill also includes a provision to increase the federal government’s current $36.1 trillion statutory debt limit by $5 trillion.

The Joint Committee on Taxation (JCT) has projected that the tax provisions of H.R. 1 will reduce net federal revenues by $4.475 trillion between 2025 and 2034 under the current-law baseline used by the House. JCT staff tax estimates that the same tax provisions would reduce net federal revenues by $715.2 billion over 10 years under a current-policy baseline used by the Senate, which assumes no revenue effect for maintaining expiring TCJA provisions.

Taking into account overall changes to federal revenue and spending, the Congressional Budget Office (CBO) has projected that H.R. 1 will increase annual federal deficits by $3.4 trillion between 2025 and 2034. CBO staff projects that H.R. 1 would reduce federal deficits by $0.4 trillion under a current-policy baseline.

Business leaders and individuals will need to evaluate the potential effect of H.R. 1 as passed by the Congress on the US economy, business operations and investments, and household finances.

For more information 

PwC will be issuing a series of Insights on the provisions of H.R. 1, the One Big Beautiful Bill Act.

Click below for the PwC Insight providing a detailed overview of the final version of H.R. 1 signed into law by President Trump.