On July 4, 2025, Congress enacted the One Big Beautiful Bill Act (P.L. 119-21). It makes several TCJA-era (Tax Cuts and Jobs Act) items permanent and adds a few temporary (“sunsetting”) perks that expire in the next few years. Below is a crisp guide with explicit end dates so clients can plan.
What “sunsetting” means
A sunset is a built-in expiration date for a tax break—unless Congress extends it, the provision ends and prior law (or nothing) returns. TCJA (Tax Cuts and Jobs Act) itself included many sunsets on December 31, 2025; OBBBA extends some, makes others permanent, and adds new temporary items. (Congress.gov)
Permanent changes (no sunset)
- Individual ordinary income tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%)made permanent starting 2026.
- Higher standard deduction framework — made permanent (with OBBBA enhancements layered on).
- Several business-side TCJA extensions (e.g., R&D expensing, bonus depreciation, and other competitiveness provisions) received longer-term certainty; see our business planning note at the end.
What’s sunsetting (with dates)
“No Tax on Tips” (new deduction) — available 2025–2028; ends after 2028.
Deduction for qualified tips (up to $25,000; MAGI phase-out begins at $150k / $300k joint). Effective tax years 2025–2028. (IRS)
“No Tax on Overtime” (new deduction) — available 2025–2028; ends after 2028.
Deduction for the premium (“half” of time-and-a-half) portion of qualified overtime. Maximum $12,500 ($25,000 joint); same MAGI phase-outs; 2025–2028 only. (IRS)
“No Tax on Car Loan Interest” (new deduction) — available 2025–2028; ends after 2028.
Deduct up to $10,000 of interest on loans for new, final-assembly-in-the-U.S. vehicles for personal use. Loans must originate after 12/31/2024; deduction available 2025–2028. (IRS)
“Senior Deduction” — available 2025–2028; ends after 2028.
Additional $6,000 deduction per eligible taxpayer age 65+ (phases out at $75k MAGI / $150k joint); 2025–2028 only. (IRS)
SALT cap (state & local tax) — temporary hike through 2029; reverts in 2030.
Cap is $40,000 for 2025 with annual increases 2026–2029; permanently resets to $10,000 starting in 2030 absent new law. (Translation: relief sunsets after 2029.)
Quick planning note: the big “cliff years” are 2028 (end of tips/overtime/car-interest/senior deductions) and 2029 (end of elevated SALT relief). Mark December 31 of each year.
Planning by taxpayer type
Individuals
- Service/tipped workers & hourly employees: consider accelerating income that qualifies for the tips/overtime deductions into 2025–2028. (IRS)
- High-tax-state filers: front-load itemized-deduction strategies while the SALT cap is higher (through 2029); expect a $10k cap in 2030.
- Car buyers: if you are considering a new vehicle (final assembly in U.S.), the interest deduction window closes after 2028. (IRS)
Business owners
- Equipment/structures and other TCJA-style incentives received added certainty/extension under OBBBA—align CapEx with the current expensing/timing rules your CPA models out. (Details vary by asset and section.)
Bottom line
OBBBA locks in key TCJA (Tax Cuts and Jobs Act) elements permanently, but the headline consumer perks are short-lived: most sunset after 2028, and the SALT relief sunsets after 2029. Plan as if the sunsets happen; treat any later extension as upside. (IRS)