FINAL: House Passes Bill 216-213
It's Done. Here's What Actually Made It Through.
After months of rumors and "sources close to negotiations," we finally have the real deal. After the Senate's dramatic 51-50 vote earlier this week (with VP Vance breaking the tie), the House just delivered the final version 216-213. President Trump signs tomorrow (July 4th at 5pm ET).
For those who read my Senate analysis, here's what changed - and what stayed the same:
THE WINNERS: WHAT BOTH CHAMBERS AGREED ON
PERMANENT 100% Bonus Depreciation
FINAL: Buy equipment, write it off completely in year one. Forever.
- Effective for property acquired after January 19, 2025
- No phase-outs, no sunsets
- Senate vs House: Both wanted this permanent - no changes
This is the game-changer. Equipment purchases are now fully deductible immediately, giving you massive cash flow benefits and planning certainty. For businesses sitting on capex decisions, this removes the guesswork.
Domestic R&D Expensing
FINAL: Immediate expensing for domestic R&D, 15-year amortization for foreign
- America-first approach won
- Effective for amounts paid or incurred in taxable years beginning after December 31, 2024
- Senate vs House: Both agreed on the domestic/foreign split
If you're conducting R&D, the message is clear: keep it stateside for the tax benefits. The documentation requirements are worth it for the immediate write-off.
Business Interest Back to EBITDA
FINAL: Depreciation and amortization don't count against interest limits
- Effective for taxable years beginning after December 31, 2024
- Senate vs House: No disagreement here
Big win for leveraged businesses. You can deduct more interest and still acquire assets. This especially benefits real estate and manufacturing industries.
Administrative Relief: 1099 Reporting Fixed
FINAL: Threshold jumps from $600 to $2,000
- Effective for payments after December 31, 2025
- Inflation-adjusted going forward
- Senate vs House: Both agreed this was ridiculous and needed fixing
Massive paperwork reduction for small businesses. No more tracking every $600+ vendor. Businesses spend countless hours on 1099 compliance - this fixes a genuine pain point.
WHERE THE HOUSE WON NEGOTIATIONS
QBI Deduction: House Approach Prevailed
FINAL: 20% rate, permanent, with better thresholds
- Phase-out starts at $75k/$150k (up from $50k/$100k)
- New $400 minimum deduction for active businesses with $1,000+ income
- Effective for taxable years beginning after December 31, 2025
What Changed: Senate wanted to keep it at 20%, House wanted 23%. They settled on 20% but with the enhanced thresholds both chambers supported.
SALT Cap: House Got Their Way
SENATE VERSION: Kept the $10,000 cap as a "placeholder"
HOUSE FINAL:
- 2025: $40,000 cap for calendar year 2025
- 2026: $40,400 cap
- 2027-2029: Annual 1% increases
- Income limits: 30% reduction for modified AGI over $500k ($250k married filing separately)
- 2030: Back to $10,000
What This Means: Rep. Mike Lawler (R-NY) threatened to vote NO if the Senate's $10k cap stood. The House delivered meaningful relief for high-tax state business owners - but it's temporary.
Estate Tax: House Expanded It
SENATE VERSION: Preserved current exemption levels
HOUSE FINAL: $15 million exemption (up from current $13.61 million)
Impact: Most family businesses won't face estate tax, with better planning certainty. For those with succession plans, this provides breathing room.
PERSONAL TAX WINS: BEYOND BUSINESS
While the business provisions get most of the attention, there are some meaningful personal tax changes too:
Permanent Tax Rates
FINAL: The individual tax rates from 2017 are now permanent
- No more sunset dates or uncertainty about rate brackets
- Standard deduction increases made permanent ($23,625 married/$15,750 single)
- Effective for taxable years beginning after December 31, 2024
- What This Means: Long-term financial planning just got easier
Child Tax Credit Enhanced
FINAL: Increased to $2,200 per child (from $2,000), permanent
- No more sunset uncertainty
- Effective for taxable years beginning after December 31, 2024
- What This Means: More tax relief for business owner families
Tips Deduction
FINAL: Up to $25,000 deduction for qualifying tip income
- Income limits: Phases out above $150k ($300k joint)
- Expires December 31, 2028
- Who Benefits: Service industry workers, but also business owners who receive tips in their operations
THE DEBT REALITY
SENATE VERSION: $5 trillion debt ceiling increase
HOUSE FINAL: Settled on the Senate's $5 trillion
CBO Impact: Still adding $3.3 trillion to deficits over 10 years, approximately $3.9 trillion with interest.
What Should You Do Now?
- Equipment Purchases: START PLANNING NOW Permanent bonus depreciation means every equipment purchase after January 19, 2025 gets full immediate expensing. The uncertainty is over.
- R&D Documentation: Review all domestic R&D activities. The immediate expensing applies to amounts paid or incurred in taxable years beginning after December 31, 2024.
- SALT Planning: You get relief through 2029, but plan for the reversion to $10k in 2030. Use these five years wisely.
- 1099 System Updates: Prepare for the $2,000 threshold starting in 2026. Update your accounting systems.
- Entity Structure Review: Permanent QBI with higher thresholds might change your optimal structure.
Bottom Line
The House basically got their way on the provisions that matter most to business owners - SALT relief and enhanced estate tax exemptions. The Senate's deficit concerns didn't win the day.
After months of uncertainty, businesses finally get real tax certainty. The core provisions - permanent bonus depreciation and QBI deduction - create a foundation for long-term planning strategies.
This is the most significant business tax legislation since 2017. Time to start planning differently.
Key Dates:
- Tomorrow 5pm ET: Trump signs
- January 19, 2025: Bonus depreciation effective
- January 1, 2025: Business interest and R&D provisions kick in
- Calendar Year 2025: SALT cap changes effective
- January 1, 2026: QBI and 1099 threshold changes effective
Start planning. This is as good as it's going to get for a while.