Comparison of House and Senate Versions of the 2025 Tax Reform Bill

Sue Schloemer

Jun 24, 2025

As Congress works toward finalizing tax legislation, both the House of Representatives and The Senate Finance Committee have released competing versions of what is being called “One Big Beautiful Bill.” While the two proposals aim to extend or make permanent many provisions from the 2017 Tax Cuts and Jobs Act (TCJA), there are some differences in key areas that will affect small businesses and individuals. Here is a side-by-side look at some of the key tax provisions in the House bill (H.R. 1) and the Senate Finance Committee’s draft.

 

Individual Taxpayer Provisions

PROVISION HOUSE VERSION SENATE VERSION
Tax Rates Permanently extends TCJA brackets Same, plus one year of inflation indexing
Standard Deduction $15,000 (single) / $30,000 (MFJ), adjusted for inflation $16,000 (single) / $32,000 (MFJ), adjusted for inflation
Senior Deduction $4,000 “senior bonus” for 2025 – 2028; phased out above $75k/$150k income $6,000 deduction for 2025 – 2028; phased out above $75k/$150k income
Child Tax Credit Increased to $2,500 for 2025 – 2028 before reverting to $2,000 Increased to $2,200 beginning in 2025
SALT Cap Raised to $40,000 per household with a phase-down to $10,000 at higher income levels Retains $10,000 cap (still being negotiated).  Clarifies and modifies the list of taxes subject to the SALT cap
QBI Deduction Increases deduction rate to 23% Makes permanent the current 20% deduction rate, and expands the deduction limit phase in range for certain taxpayers
Estate & Gift Tax $15M / $30M MFJ, indexed Same provision
Charitable Giving $150/$300 deduction for non-itemizers 2025 – 2028 Permanent above-the-line deduction of up to $1,000/$2,000 deduction for non-itemizers

 

Business & Wage Provisions

PROVISION HOUSE VERSION SENATE VERSION
Bonus Depreciation 100% for Jan. 19, 2025 through 2029 100% permanent starting Jan. 19, 2025
R&D Expensing Temporary full deduction for U.S. R&D for five years Permanent expensing of U.S. R&D, plus retroactive relief
Qualified Production Property 100% first-year depreciation Same provision
Pass-Through Entity (PTE) SALT Deduction No deduction for Specified Service Trades or Businesses (SSTBs) Does not repeal PTE taxes for SSTBs, but establishes limits for the deduction
Tips Deduction Unlimited deduction for cash tips for employees with compensation below a specified threshold ($160k in 2025, adjusted annually for inflation) Up to $25,000 (2025–2028) with phase out for AGI over $150k/$300k)
Overtime Deduction Deduction for overtime compensation (2025 – 2028), excluding highly compensated individuals Up to $12.5k/$25k (2025 – 2028) with phase out for AGI over $150k/$300k

As the House and Senate work toward reconciling their differences, the final version of the bill remains uncertain. Our team is closely tracking the legislative process and will continue to keep you informed as new details emerge. Contact our team to discuss how these proposed changes could affect your tax planning strategy.

 

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About The Author

Sue enjoys helping clients succeed. Her breadth and depth of accounting knowledge combined with over 25 years of…

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