How the One Big Beautiful Bill Act Affects Federal Tax Brackets for Single-Income H‑1B Families

Key Takeaways

• One Big Beautiful Bill makes 2017 TCJA tax cuts permanent starting 2025 for all taxpayers, including H-1B families.
• Standard deduction rises to $15,750 for singles and $31,500 for married filing jointly in 2025, lowering taxable income.
• No direct changes to state income tax brackets; indirect effects possible if states use federal AGI as base.

As of July 3, 2025, the landscape of federal income tax in the United States 🇺🇸 is set for a major shift. The House of Representatives has passed the One Big Beautiful Bill Act (H.R. 1), a sweeping piece of legislation that brings lasting changes to federal income tax brackets and related tax rules. This bill, which is expected to be signed by President Trump on July 4, 2025, will have a direct impact on many families, including those on H-1B visas who rely on a single income. Here’s a detailed look at what this means, how it affects H-1B families, and what steps they should consider next.

What Is the One Big Beautiful Bill Act and Who Does It Affect?

The One Big Beautiful Bill Act is a large legislative package that covers tax reform, border security, energy policy, and Medicaid changes. For H-1B families—especially those with only one income earner—this bill’s tax changes are the most important. The bill makes permanent several tax cuts and deductions that were set to expire, giving families more certainty about their tax bills in the years ahead.

The bill passed the House by a narrow margin of 218-214 on July 3, 2025, and is expected to become law immediately after President Trump’s signature. These changes will apply to the 2025 tax year and beyond.

Federal Income Tax Brackets: What’s Staying the Same and What’s Changing?

The most important change for H-1B families is that the federal income tax brackets will not increase. The One Big Beautiful Bill Act keeps the lower tax rates that were first introduced by the 2017 Tax Cuts and Jobs Act (TCJA). Before the TCJA, the top federal income tax rate was 39.6%. The TCJA lowered this to 37% and reduced rates for most other brackets as well.

These lower rates were supposed to end after 2025, but the new bill makes them permanent. This means:

• Federal income tax brackets remain at the lower TCJA rates.
• There will be no automatic increase in tax rates for families, including those on H-1B visas.
• Taxpayers can plan for the future without worrying about sudden jumps in their federal tax bills.

For single-income H-1B families, this is good news. Many H-1B visa holders are skilled workers who may earn salaries that put them in the middle or upper tax brackets. Keeping these rates low helps them keep more of their earnings.

Standard Deduction: Higher Amounts for 2025

Another key part of the One Big Beautiful Bill Act is the increase in the standard deduction. The standard deduction is the amount of income you can subtract from your total earnings before calculating how much tax you owe. This is especially important for families who do not itemize their deductions.

For the 2025 tax year:

• Single filers will see their standard deduction rise from $15,000 to $15,750.
• Married couples filing jointly will see an increase from $30,000 to $31,500.

This increase is permanent, as the bill also locks in the larger standard deduction amounts that were first introduced by the TCJA. For single-income H-1B families, this means a bigger portion of their income will not be taxed, which can lower their overall tax bill.

Example:
If an H-1B family with one working parent earns $80,000 in 2025, they can subtract the new $31,500 standard deduction (if married filing jointly) from their income. This means they will only pay tax on $48,500, not the full $80,000.

State Income Tax Brackets: No Direct Changes, But Indirect Effects Possible

The One Big Beautiful Bill Act is a federal law, so it does not directly change state income tax brackets. Each state in the United States 🇺🇸 sets its own tax rules and rates. However, many states use the federal adjusted gross income (AGI) as the starting point for calculating state taxes.

What does this mean for H-1B families?

• No direct change to state tax rates or brackets.
• Possible indirect effects if your state uses federal AGI. For example, if the federal standard deduction increases, your state taxable income may also go down, depending on state rules.
• State responses will vary. Some states may choose to update their own tax codes to match the federal changes, while others may not.

Action Step:
H-1B families should check with their state’s tax authority or a tax professional to see how these federal changes might affect their state tax bills.

Other Tax Provisions Affecting H-1B Families

The One Big Beautiful Bill Act also extends several other tax benefits that were part of the TCJA. While not all details are available yet, some highlights include:

• Child Tax Credit: The bill continues the expanded child tax credit, which can help families with children reduce their tax bills.
• Dependent Care Credit: Families who pay for child care may still be able to claim this credit, making it easier to afford care while working.
• Bonus Deduction for Older Adults: There is a new $6,000 deduction for older adults. While this may not help most H-1B families (who are often younger), it is part of the broader package.

These credits and deductions can add up, especially for single-income families who may have less flexibility in their budgets.

Why These Changes Matter for H-1B Families

Single-income H-1B families often face unique challenges. Many H-1B visa holders are the sole earners in their households because their spouses may not have work authorization. This means the family relies on one salary to cover all expenses, including housing, health care, and education.

Key reasons these tax changes matter:

• Certainty for the future: With permanent tax rates and deductions, families can plan ahead without worrying about sudden tax hikes.
• Lower taxable income: The higher standard deduction means less income is taxed, which can help families save money.
• No increase in marginal rates: Since the tax brackets are not going up, families do not have to worry about paying more tax if their income rises slightly.
• Indirect state effects: While state taxes are not directly changed, the federal changes may still lower state tax bills in some cases.

How Should H-1B Families Respond?

With these changes, H-1B families should take a few practical steps to make sure they get the most benefit:

1. Review your tax withholding: Make sure your employer is taking out the right amount of tax from your paycheck. With a higher standard deduction, you may need to adjust your withholding to avoid overpaying or underpaying.
2. Check eligibility for credits: If you have children or pay for child care, see if you qualify for the child tax credit or dependent care credit.
3. Consult a tax professional: Tax rules can be complex, especially for visa holders. A tax advisor who understands H-1B issues can help you make the best choices.
4. Monitor state tax changes: Keep an eye on your state’s tax rules to see if they change in response to the new federal law.

Broader Context: What Else Is in the One Big Beautiful Bill Act?

While the focus here is on taxes, it’s important to know that the One Big Beautiful Bill Act covers much more. It includes:

• Border security measures
• Energy policy changes
• Major Medicaid cuts and changes to health insurance marketplaces

For H-1B families, the Medicaid and health insurance changes could also affect household budgets, especially if they rely on marketplace health plans. Advocacy groups like the American Hospital Association (AHA) have raised concerns about these healthcare changes, though they have not commented directly on the tax bracket changes.

Expert Opinions and Concerns

Tax experts say that making the TCJA tax cuts permanent removes a lot of uncertainty for families and individuals. People can plan for the future, knowing what their tax rates will be. However, some experts worry that keeping tax rates low for a long time could reduce the amount of money the federal government collects, which might lead to budget problems later.

Financial planners suggest that H-1B families:

• Review their tax situation each year to make sure they are taking advantage of all available deductions and credits.
• Adjust estimated tax payments if needed, especially if their income changes or if they have other sources of income, such as investments.

What About Future Changes?

The tax provisions in the One Big Beautiful Bill Act are designed to last. Unless Congress passes another law, these rates and deductions will stay in place for the foreseeable future. However, tax laws can always change, so it’s important for families to stay informed.

States may also respond to the federal changes in different ways. Some may update their own tax codes to match the new federal rules, while others may keep their current systems. H-1B families living in states with high income taxes should pay special attention to any announcements from their state tax agencies.

Where to Find Official Information

For those who want to read the full text of the bill or check its status, the official U.S. Congress website provides up-to-date information on H.R. 1, the One Big Beautiful Bill Act.

For guidance on federal income taxes, including the latest forms and instructions, the IRS website is the best source. If you need to file your taxes, you can find the latest forms, such as Form 1040, directly on the IRS site.

What Does This Mean for the Future of H-1B Families in the United States 🇺🇸?

The One Big Beautiful Bill Act brings stability and predictability to federal income tax brackets for H-1B families. By making the TCJA tax cuts and higher standard deduction permanent, the bill helps single-income families keep more of their earnings and plan for the future with confidence.

However, the bill does not change state income tax brackets directly, so families should still pay close attention to their state’s tax rules. The broader package also includes changes to healthcare and other areas that may affect family budgets.

As reported by VisaVerge.com, these changes are likely to be welcomed by many H-1B families who have faced uncertainty about their tax situation in recent years. Still, it’s important for families to stay informed, review their tax situation each year, and seek professional advice when needed.

Key Takeaways for H-1B Families

• Federal income tax brackets remain at lower TCJA rates, now permanent.
• Standard deduction increases to $15,750 (single) and $31,500 (married filing jointly) for 2025.
• No direct changes to state income tax brackets, but possible indirect effects.
• Other tax credits and deductions extended, including child and dependent care credits.
• Healthcare and Medicaid changes in the bill may affect some families.
• Stay informed and consult tax professionals to make the most of these changes.

By understanding these changes and taking the right steps, single-income H-1B families can better manage their tax bills and plan for a secure future in the United States 🇺🇸. For more details on the One Big Beautiful Bill Act and its impact on federal income tax brackets, visit the official U.S. Congress page for H.R. 1.

If you are an H-1B visa holder or part of an H-1B family, now is the time to review your finances, check your eligibility for tax credits, and make sure you are ready for the changes coming in 2025. This new law brings both opportunities and responsibilities, and staying informed is the best way to make the most of them.

Learn Today

One Big Beautiful Bill Act → Legislation passed in 2025 that permanently modifies federal income tax rates and deductions, affecting many families.
H-1B visa → A US work visa allowing skilled foreign professionals to work temporarily in the United States.
Standard deduction → A fixed amount subtracted from taxable income, reducing the amount of income subject to federal tax.
Tax Cuts and Jobs Act (TCJA) → 2017 law that lowered federal income tax rates and increased deductions, set to expire in 2025 before new bill.
Adjusted Gross Income (AGI) → An individual’s total gross income minus specific deductions, used to calculate taxable income and state taxes.

This Article in a Nutshell

The One Big Beautiful Bill Act, effective 2025, permanently keeps lower federal tax rates and increases standard deductions, benefiting single-income H-1B families by providing tax stability and reducing taxable income, while state taxes remain unchanged directly but may be indirectly affected.
— By VisaVerge.com