The Big Beautiful Bill - Changes You Might Not Have Heard About

Because the Big Beautiful Bill is so comprehensive (over 800+ pages!), it contains many provisions beyond the headline items. Some of these didn’t get a lot of media attention but are worth noting.

​Here are a few lesser-known changes in the new law:

• Tax Breaks for Tipped Workers and Overtime Pay: The bill includes special perks for working folks who earn tips or overtime. If you receive tips on the job (like servers, taxi drivers, hairdressers, etc.), you can now exclude up to $25,000 of those tips from your taxable income. This means the first $25k in tips each year could be tax-free. Similarly, if you work a lot of overtime hours, the law lets you deduct a portion of your overtime pay – effectively making up to $12,500 of overtime earnings tax-free as well. These provisions (available through 2028) put more money back in the pockets of those working extra hours or relying on tips. 
• Above-the-Line Charitable Deduction for Everyone: Usually, only people who itemize deductions (often higher-income folks with mortgages, etc.) get to deduct charitable donations on their taxes. The new law introduces a special $1,000 “above-the-line” charitable deduction for anyone, even if you don’t itemize. Married couples can get $2,000. This means you can donate to your favorite charity and subtract that amount from your income before calculating taxes, in addition to your standard deduction. 
• New 1% Tax on Big Money Transfers Abroad: One surprising addition is a 1% tax on certain money transfers leaving the United States (often called a remittance tax). If someone sends money to another country (for example, wiring a large sum to a foreign bank or as a remittance), a 1% fee may apply to the amount. The bill exempts many smaller routine transfers and personal remittances, so this mainly targets large or business-related outflows. While most Americans won’t encounter this, it’s noteworthy as a new kind of tax that didn’t get much press. 
• Green Energy Tax Credit Rollbacks: The law quietly rolled back or repealed a number of green energy incentives that were previously available. For instance, certain tax credits for buying electric vehicles, installing solar panels, or other clean energy projects were reduced or eliminated for the future. Projects that are already in the pipeline may be grandfathered in, but going forward, the generous credits from the 2022 Inflation Reduction Act (like the EV credit, solar credit, etc.) are largely scaled down. This change was not highlighted in general news about the bill (which focused more on tax cuts), but it could affect individuals and businesses planning large clean energy purchases. They might find the expected tax rebates are smaller or unavailable. On the flip side, the bill extended a credit for clean fuel production through 2030 and kept some incentives for things like nuclear and hydropower projects. 

Why do these obscure changes matter? Even if these items don’t affect you directly, they show how far-reaching the bill is. For example, the breaks on tips and overtime benefit service industry workers – putting a bit more cash in the pockets of waiters, bartenders, ride-share drivers and others who work hard for extra pay.

The new above-line charity deduction is a plus for civic-minded folks at all income levels, possibly boosting donations to nonprofits. The remittance tax might influence high-net-worth individuals or businesses moving funds internationally (or even foreign workers in the U.S. sending money home, though many small transfers are exempt). And the rollback of green credits might change the math for anyone considering buying an electric car or installing solar panels in the future.