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🇺🇸 The One Big Beautiful Bill: What It Actually Does (H.R. 1 - 2025)

Updated: Nov 4, 2025

"Congress passed what some are calling the “One Big Beautiful Bill” — a sweeping federal tax bill officially titled:

🔹 The Tax Relief for American Families and Workers Act of 2025

It’s a big deal — but the legal text is long, complicated, and full of cross-references. This guide is your plain-English walkthrough of exactly what changed, what it means for you, and where each fact comes from in the law.


🔑 Quick Summary: What Changed?

🔧 Area

📈 Change

📜 Bill Section

Child Tax Credit

Increased to $2,200 in 2025

Sec. 101(a)(1)(B)

Refundable CTC

Increased to $2,000 in 2025

Sec. 102(a)(1)(B)

Bonus Depreciation

100% expensing extended through 2025

Sec. 201(a)

R&D Expenses

Full deduction restored through 2025

Sec. 202(a)

1099-K Reporting Delay

$600 threshold delayed until 2026

Sec. 401(c)

Low-Income Housing Tax Credit (LIHTC)

Allocation increase + bond threshold reduced

Sec. 301–302

Disaster Relief

Expanded rules for losses and withdrawals

Title VI (Sec. 601–604)


Now let’s walk through each of these — clearly, accurately, and with citations.


👶 1. Child Tax Credit (CTC) — Bigger and More Refundable

🔹 What Changed:

  • The maximum credit per child increases from $2,000 to $2,200 for tax year 2025.

  • The refundable portion increases to $2,000.

  • The phase-in calculation changes: now it's per-child, not based on total income alone.

  • Credit amounts will be indexed for inflation starting in 2024.


💡 Why it Matters:

More families — especially those with low or moderate incomes — will qualify for larger refunds, even if they don’t owe federal income tax.


📜 Legal Citations:

  • Sec. 101(a)(1)(B): "...by striking ‘$2,000’ and inserting ‘$2,200’" → Amends IRC §24(h)(2).

  • Sec. 102(a)(1)(B): "...by striking ‘$1,600’ and inserting ‘$2,000’" → Amends IRC §24(d)(1)(A)(ii).

  • Sec. 103: Inflation adjustment provision.

  • Sec. 104: Anti-abuse and integrity rules.


🏭 2. 100% Bonus Depreciation Extended Through 2025

🔹 What Changed:

  • Allows businesses to immediately deduct 100% of the cost of most new or used equipment placed in service from Jan 1, 2023 to Dec 31, 2025.

  • Without this bill, bonus depreciation would have dropped to 60% in 2024.


✅ Applies to:

  • Machinery

  • Equipment

  • Computers

  • Certain vehicles

  • Qualified improvement property


📜 Legal Citations:

  • Sec. 201(a): Amends IRC §168(k)(6)(A) to extend 100% rate.

  • "...by striking ‘January 1, 2023’ and inserting ‘January 1, 2026’".


🧪 3. Research and Experimental (R&E) Expenses — Full Deduction Reinstated

🔹 What Changed:

  • Temporarily reverses a TCJA change that forced businesses to amortize R&E expenses over 5 years.

  • Now, businesses can fully deduct U.S.-based R&E costs in the year incurred, through 2025.


⚠️ Important:

  • Applies only to domestic (not foreign) research.

  • Repeal ends January 1, 2026 — amortization resumes unless Congress acts again.


📜 Legal Citations:

  • Sec. 202(a): Temporarily repeals amortization rule in IRC §174(a)(2).

    "No amortization shall be required... before January 1, 2026.".


📋 4. 1099-K Reporting Threshold Delay — No $600 Surprise in 2025

🔹 What Changed:

  • Delays the $600 reporting threshold for third-party payments (e.g., PayPal, Venmo, Etsy) until 2026.

  • For 2024, threshold is temporarily raised to $5,000.


💡 Why it Matters:

Many gig workers and casual sellers were about to receive confusing 1099-K forms for small transactions. This change provides relief and gives the IRS time to clarify enforcement.


📜 Legal Citations:

  • Sec. 401(c): "...no information return shall be required... unless aggregate payments exceed $5,000 for calendar year 2024...".

  • Amends transition rules in IRC §6050W(e).


🏘️ 5. Low-Income Housing Tax Credit (LIHTC) Expanded

🔹 What Changed:

  • Increases the annual LIHTC allocation to states.

  • Reduces the bond financing requirement from 50% to 30%.


💡 Why it Matters:

These changes make it easier and faster to finance affordable housing projects in high-demand areas.


📜 Legal Citations:

  • Sec. 301: Temporarily increases the 9% credit allocation.

  • Sec. 302: Reduces bond test under IRC §42(h)(4)(B) from “50 percent” to “30 percent”.


🏚️ 6. Disaster Tax Relief (Title VI)

🔹 What Changed:

  • Provides special tax relief for federally declared disasters between Jan 1, 2021 and 60 days after enactment.

  • Includes:

- Easier casualty loss deductions.

- Penalty-free early withdrawals from retirement plans.

- Expanded employee retention credit for certain disaster areas.


📜 Legal Citations:

  • Sec. 601–604: Various relief provisions modeled on prior disaster tax laws (e.g., PATH Act).


🧾 What Did Not Change

Let’s be clear: many rumored changes were NOT included in this bill.

❌ Proposal

❌ Status

New income tax brackets

❌ Not changed

Higher standard deduction

❌ Not included

Capital gains tax changes

❌ Not in this bill

SALT deduction cap adjustment

❌ Not addressed

Corporate tax rate changes

❌ Remains at 21%


👥 Who This Bill Helps Most

👤 Taxpayer Type

👍 Benefit You Get

Parents with children

Higher Child Tax Credit + Bigger Refunds

Small business owners

Equipment expensing + R&D deductions restored

Gig economy workers

Delay in 1099-K reporting changes

Affordable housing devs.

Easier access to tax credits and financing

Disaster area residents

Casualty loss relief + early withdrawal options


✅ Action Steps: What Should You Do?

  1. Parents: Check if you qualify for the full $2,200 CTC in 2025.

  2. Businesses: Track equipment purchases and R&D expenses — the 100% expensing window ends after 2025.

  3. Freelancers/gig workers: You likely won’t receive a 1099-K for 2024 unless earnings exceed $5,000.

  4. Tax preparers/advisors: Update your planning for depreciation, credits, and refundability.

  5. Everyone: If you live in a recent disaster area, see if you qualify for retroactive relief.


📚 Sources & References

Every figure and policy in this post is taken directly from:

🧑‍💼 Final Thoughts

The Tax Relief for American Families and Workers Act of 2025 isn’t just political theater — it contains real, immediate tax benefits for millions of Americans. But most people won't know how to claim them unless they’re paying attention.


If you’re a:

  • Parent

  • Self-employed worker

  • Small business owner

  • Landlord

  • Freelancer

  • Disaster-area resident


...you should review how this bill affects your 2025 tax return — now, not later.

 
 
 

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