How the “Big Beautiful Bill” Could Affect Your 2025 Tax Filings

As Congress and the White House debate new tax policy in 2024, one proposal has been making waves: what some lawmakers and media outlets have dubbed the “Big Beautiful Bill.” This sweeping piece of legislation could significantly impact how individuals and businesses approach their 2025 tax filings.

At Lang Faylor Chomo & Company, we’re keeping a close eye on the proposed changes so our clients are prepared — not surprised. While final details of the bill are still in flux, here’s a breakdown of key provisions being discussed and how they could affect your upcoming tax season.

What Is the “Big Beautiful Bill”?

Unofficially referred to as the “Big Beautiful Bill,” this is a proposed federal tax and economic policy package that aims to:

• Extend or revise parts of the 2017 Tax Cuts and Jobs Act (TCJA)

• Adjust income tax brackets and standard deductions

• Incentivize domestic manufacturing and energy investments

• Reshape tax credits for families and small businesses

• Close certain loopholes for high-income earners and corporations

While it hasn’t been signed into law yet, it’s likely that some version of this legislation — or its core ideas — will influence how taxpayers file in 2025.

How It Could Affect Individuals

1. Changes to Income Tax Brackets

The bill may adjust marginal tax rates, particularly for higher-income earners. Some proposals call for:

• Reinstating the 39.6% top tax bracket for incomes above a certain threshold

• Narrowing certain middle-income brackets to raise revenue

• Revising phase-out rules for deductions and credits

What this means: If your income changed in 2024, you could be in a different bracket next year — and may want to plan withholding accordingly.

2. Increased Child Tax Credit

An expanded Child Tax Credit (CTC) is being considered, including:

• A higher maximum credit per child

• Monthly payment options for eligible families

• Increased income thresholds for phase-outs

Planning tip: Families should keep updated records of dependents and income eligibility for smooth filing and to maximize benefits.

3. Restored or New Deductions

Provisions may reintroduce or enhance:

• State and Local Tax (SALT) deductions

• Deductions for home office use (particularly for remote workers)

• Above-the-line deductions for student loan interest and education expenses

How It Could Affect Small Businesses

1. Section 199A (Pass-Through Deduction) Updates

The 20% deduction for qualified business income (QBI) — a favorite among small businesses and LLCs — may be modified or extended under the new bill.

If you’re a sole proprietor, partner, or S-corp owner, these changes could affect how much of your income is deductible.

2. Bonus Depreciation & Equipment Expensing

The bill may extend or restructure 100% bonus depreciation and Section 179 expensing limits, impacting how businesses invest in new equipment and technology.

3. New Incentives for Domestic Production

Small manufacturers or energy-efficient businesses may be eligible for new or increased credits related to:

• Domestic production

• Renewable energy or energy-saving upgrades

• Workforce development and hiring credits

What About Capital Gains and Investments?

Another item on the table: changes to capital gains taxation. Lawmakers are debating:

• Increasing the long-term capital gains rate for high earners

• Modifying rules around step-up in basis for inherited assets

• Additional reporting requirements for digital assets and crypto

This is an important area for those with brokerage accounts, real estate portfolios, or digital investments.

How to Prepare Now for 2025

Even though nothing is finalized, now is the time to start planning:

• Schedule a mid-year tax review with a professional

• Revisit your withholdings and estimated payments

• Keep detailed records of expenses, charitable contributions, and business activity

• Discuss potential entity structure changes if you're a small business owner

• Stay informed — the legislation may evolve quickly

Lang Faylor Chomo & Company Can Help You Navigate What’s Next

Tax laws change — your preparation shouldn’t. At Lang Faylor Chomo & Company, we stay ahead of the headlines so you can file with clarity and confidence.

Whether you're an individual filer, family, or business owner, we’ll help you understand how the proposed “Big Beautiful Bill” could affect your 2025 taxes — and create a strategy that works in your favor.

Contact us today to schedule a tax planning consultation or sign up for updates as legislation evolves.