El One Big Beautiful Bill Act (OBBBA), approved on July 4, 2025 under former President Trump's second term, is one of the most comprehensive fiscal reforms in recent years. Below we answer the 10 most common questions taxpayers ask about this law and its impact on taxes.

1. What exactly is the OBBBA?

This is a legislative package that extends tax cuts, introduces new deductions, increases certain credits and cuts social programs. Its stated objective is stimulate economic growth and simplify the tax system, although experts point out that it will also increase the federal deficit (source: Reuters, 2025).

2. How will it affect my tax return?

Among the main changes:

• The reduced individual tax rates from 2017 are permanently extended.
• The SALT deduction limit (state and local taxes) is increased to 40,000 USD for households with incomes of less than 500,000 USD.
• It is allowed to deduct up to 25,000 USD in tips and overtime between 2026 and 2028.
• Special deductions are created, such as interest on car loans made in the U.S. (up to 10,000 USD) and an additional fixed deduction for older people (up to 6,000 USD per person).
• Child credit rises to $2,200 per dependent, adjusted for inflation (source: Investopedia, 2025).

3. Who benefits the most?

Analysis by the House Ways and Means Committee indicates that:

• Households with incomes under $50,000 will see an average tax reduction of 14.9%.
• El 66% of tax cuts will benefit families with incomes of less than 500,000 USD.
• A typical family of four might have a increase of 10,900 USD in disposable income.
• In Texas, some taxpayers could save on average 3,752 USD, and in certain counties exceed 8,000 USD (source: Austin American-Statesman, 2025).

4. What impact will it have on the deficit?

The Congressional Budget Office (CBO) projects that the law will add 2.8 trillion dollars in the federal deficit between 2025 and 2034. Other analyses, such as that of Tax Policy Center, estimate that the impact could reach up to 5 trillion dollars in the same decade.

5. How does it affect social programs?

The OBBBA reduces funding for Medicaid and SNAP (food stamps), which could leave millions without coverage or assistance. In addition, it cuts incentives for clean energy, eliminating subsidies for electric vehicles and solar or wind projects (source: Associated Press, 2025).

6. What is the deduction for tips and overtime?

It is a temporary measure (2026-2028) that allows you to deduct up to 25,000 USD in additional income from tips or overtime payments. It was designed primarily for service industry workers (source: Investopedia, 2025).

7. What about inheritances and donations?

The law raises the estate tax exemption to $15 million for individuals and $30 million for couples. It also enters the calls “Trump Accounts”, savings accounts for minors with federal contributions and tax-free growth to the age of majority (source: Kiplinger, 2025).

8. What benefits does it bring to small businesses?

Business owners who tax as “pass-through entities” will be able to deduct the 23% of your income, and the immediate depreciation of the 100% in capital investments. This facilitates reinvestment and encourages the growth of small and medium-sized businesses.

9. What do citizens think?

A survey of Pew Research revealed that the 49% of Americans are opposed to the OBBBA, mainly because of the impact on the deficit and the cuts to social programs. In addition, confusion over the real scope of the law has generated criticism of his name.

10. Why is your name confusing?

Trump himself acknowledged that “One Big Beautiful Bill” is a striking but not very descriptive name. For this reason, Republican advisors have begun to promote alternative names such as “Working Families Tax Cut” to improve public perception (source: Politico, 2025).

📌 Conclusion

El OBBBA introduces extensive tax cuts and new credits that can benefit families and small businesses. However, it also increases the deficit and reduces the funding of social programs. For taxpayers, it's key understand the new deductions and credits available, and consider tax advice to make the most of your benefits.

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