Key Takeaways
• One Big Beautiful Bill Act raises standard deduction by $1,000 for singles, $2,000 for married couples until 2028.
• Mortgage interest deduction cap is permanently $750,000; SALT deduction cap increases to $40,000 for incomes under $500,000.
• No specific changes for H-1B visa holders on deductions; tax and immigration provisions impact filing and application fees.
As of July 3, 2025, the One Big Beautiful Bill Act (H.R. 1) stands at the center of both tax and immigration policy discussions in the United States 🇺🇸. The bill, which has passed the House of Representatives and is now under review in the Senate, proposes several changes that could affect millions of taxpayers, including H-1B visa holders. While the bill does not specifically target H-1B visa holders in its tax provisions, its broad changes to the standard deduction, itemized deductions, and other tax rules will impact how these skilled workers file their taxes and plan their finances.
This article breaks down what the One Big Beautiful Bill Act means for H-1B visa holders, focusing on the standard deduction, itemized deductions (including mortgage interest, charitable donations, and SALT deductions), and what practical steps H-1B workers should consider as the bill moves forward.
What Is the One Big Beautiful Bill Act and Who Does It Affect?
The One Big Beautiful Bill Act, also known as H.R. 1, is a sweeping piece of legislation that covers both tax and immigration policy. Passed by the House of Representatives in 2025, it is now pending in the Senate. The bill aims to change how much people pay in taxes, how they can claim deductions, and how the government handles immigration applications and enforcement.
H-1B visa holders are foreign nationals who work in the United States 🇺🇸 in specialty occupations, often in technology, engineering, or healthcare. They are required to pay U.S. taxes just like American citizens and permanent residents. This means any changes to tax laws, including those in the One Big Beautiful Bill Act, will affect them directly.
Key Tax Changes in the One Big Beautiful Bill Act
Standard Deduction: What’s New?
The standard deduction is a fixed amount that taxpayers can subtract from their income before calculating how much tax they owe. It is the simplest way to reduce taxable income, and most people use it instead of itemizing deductions.
What’s changing?
– The bill increases the standard deduction by $1,000 for single filers and $2,000 for married couples filing jointly.
– This increase will last through 2028.
Why does this matter?
– With a higher standard deduction, fewer people will find it worthwhile to itemize deductions (list out individual expenses like mortgage interest or charitable donations).
– This change applies to all taxpayers, including H-1B visa holders.
Example:
If you are an H-1B visa holder filing as a single person, your standard deduction will be $1,000 higher than before. This means you can subtract more from your income, possibly lowering your tax bill.
Itemized Deductions: What’s Staying and What’s Changing?
Itemized deductions allow taxpayers to list specific expenses—like mortgage interest, state and local taxes (SALT), and charitable donations—to reduce their taxable income. Taxpayers choose to itemize only if their total deductions are more than the standard deduction.
Mortgage Interest Deduction
- The bill permanently extends the lower limit for the mortgage interest deduction.
- Taxpayers can deduct interest on up to $750,000 of home mortgage debt ($375,000 if married filing separately).
- This rule was first set by the Tax Cuts and Jobs Act (TCJA) and now becomes permanent.
Impact on H-1B visa holders:
If you own a home in the United States 🇺🇸 and your mortgage is less than $750,000, you can still deduct the interest you pay, but the cap remains lower than it was before the TCJA. This affects all taxpayers, not just H-1B visa holders.
Charitable Donations
- The bill keeps the top individual income tax bracket at 37% instead of letting it rise to 39.6%.
- For people who itemize, this means the tax savings from charitable donations are slightly less than they would have been if the top rate had increased.
- There is also a new limit on itemized deductions for high-income taxpayers, which could further reduce the benefit of giving to charity.
Example:
If you donate $1,000 to a qualified charity and you are in the top tax bracket, your tax savings will be $370 (37% of $1,000), not $396 (39.6% of $1,000).
SALT Deduction (State and Local Taxes)
- The bill raises the SALT cap from $10,000 to $40,000 for taxpayers with less than $500,000 in modified adjusted gross income (AGI).
- This change applies to all eligible taxpayers, including H-1B visa holders.
What does this mean?
If you pay high state and local taxes and your income is below $500,000, you can now deduct up to $40,000 in these taxes, which is a big jump from the previous $10,000 cap.
Does the Bill Change How H-1B Visa Holders Claim Deductions?
No, the One Big Beautiful Bill Act does not specifically change the rules for H-1B visa holders when it comes to claiming the standard deduction or itemized deductions. The changes apply to all taxpayers who are considered “resident aliens” for tax purposes, which includes most H-1B visa holders who have been in the United States 🇺🇸 long enough to meet the IRS “substantial presence test.”
Key points for H-1B visa holders:
– You can still choose between the standard deduction and itemizing, just like U.S. citizens.
– The increased standard deduction may make it less likely that itemizing will save you more money.
– The rules for mortgage interest, charitable donations, and SALT deductions are the same for H-1B visa holders as for other taxpayers.
For more details on how the IRS defines resident aliens and the substantial presence test, visit the IRS official page on Alien Tax Status.
Immigration Provisions: What Else Is in the Bill?
While the tax changes are important, the One Big Beautiful Bill Act also includes several immigration-related provisions. These do not directly affect how H-1B visa holders claim tax deductions, but they are worth noting:
- Increased fees for various immigration applications, including employment-based visas.
- Stricter enforcement measures for visa overstays and unauthorized work.
- Changes to processing times and eligibility for certain immigration benefits.
As reported by VisaVerge.com, these immigration provisions could make it more expensive and time-consuming for H-1B visa holders and their employers to apply for extensions, green cards, or other benefits. However, none of these changes alter the basic tax filing rules for H-1B workers.
Practical Implications for H-1B Visa Holders
Tax Planning Strategies
Given the changes in the One Big Beautiful Bill Act, H-1B visa holders should review their tax situation carefully each year. Here are some practical steps:
- Compare the standard deduction to your potential itemized deductions each year. If your mortgage interest, charitable donations, and SALT payments add up to less than the new, higher standard deduction, it makes sense to take the standard deduction.
- Keep records of all possible deductions in case your itemized deductions do exceed the standard deduction in a future year.
- If you own a home, remember that the mortgage interest deduction is capped at $750,000 of debt. If your mortgage is higher, you can only deduct interest on the first $750,000.
- If you make large charitable donations, be aware that the tax savings may be less than before, especially if you are a high-income earner subject to new limits.
- If you pay high state and local taxes, check if you qualify for the increased SALT cap. This could make itemizing more attractive if your total deductions exceed the standard deduction.
Homeowners and the Mortgage Interest Deduction
For H-1B visa holders who have bought homes in the United States 🇺🇸, the permanent extension of the $750,000 mortgage interest deduction limit is important. If you bought your home after December 15, 2017, this lower cap applies to you. If you bought your home before that date, you may be “grandfathered” under the old $1 million cap, but you should check with a tax professional.
Charitable Giving
If you are in a high tax bracket and like to give to charity, the lower top tax rate means your tax savings from donations will be a bit smaller. Also, the new limit on itemized deductions for high-income earners could further reduce your benefit. Consider whether it makes sense to “bunch” your donations—give more in one year to exceed the standard deduction, then take the standard deduction in other years.
SALT Deduction and High-Tax States
Many H-1B visa holders live in states with high income or property taxes, such as California or New Jersey. The higher SALT cap of $40,000 (for those with income under $500,000) could make a big difference. If you qualify, you may be able to deduct much more in state and local taxes, making itemizing worthwhile.
What Should H-1B Visa Holders Do Next?
- Stay informed as the One Big Beautiful Bill Act moves through the Senate. The final version could include more changes.
- Consult a tax professional who understands both U.S. tax law and the unique situations of H-1B visa holders.
- Keep good records of all possible deductions, even if you usually take the standard deduction.
- Monitor your income to see if you qualify for the higher SALT cap and to understand how new limits on itemized deductions might affect you.
Background: Why Do These Changes Matter?
H-1B visa holders make up a large part of the skilled workforce in the United States 🇺🇸, especially in technology and healthcare. They pay the same taxes as U.S. citizens and often have complex financial lives, with mortgages, student loans, and family responsibilities both in the United States 🇺🇸 and abroad.
Tax law changes can have a big impact on their take-home pay, ability to buy homes, and decisions about giving to charity. The One Big Beautiful Bill Act, by raising the standard deduction and changing the rules for itemized deductions, could shift how H-1B visa holders approach their finances.
Looking Ahead: The Senate and Possible Changes
As of now, the One Big Beautiful Bill Act is not yet law. The Senate may change some of its provisions, especially those related to taxes and immigration. H-1B visa holders and their employers should watch for updates from official sources, such as the U.S. Congress official website, to stay up to date.
Conclusion: Key Takeaways for H-1B Visa Holders
- The One Big Beautiful Bill Act does not specifically change how H-1B visa holders claim the standard deduction or itemized deductions.
- The standard deduction is going up, which may make itemizing less useful for many people.
- The mortgage interest deduction cap of $750,000 is now permanent.
- The SALT deduction cap is higher for those with income under $500,000.
- Charitable donation tax savings are slightly lower due to the top tax rate staying at 37% and new limits for high earners.
- H-1B visa holders should review their tax situation each year and consult professionals as needed.
By understanding these changes and planning ahead, H-1B visa holders can make the most of their tax situation and avoid surprises. For the latest updates, always check official government resources and trusted immigration news outlets.
Learn Today
One Big Beautiful Bill Act → A 2025 U.S. legislative bill revising tax and immigration policies, impacting many taxpayers and visa holders.
Standard Deduction → A fixed tax deduction amount subtracted from income before calculating taxable earnings.
Itemized Deductions → Specific deductible expenses like mortgage interest or donations listed instead of taking the standard deduction.
SALT Deduction → State and local tax payments that taxpayers can deduct from federal taxable income, capped by law.
Resident Alien → A non-U.S. citizen meeting IRS presence tests, taxed like U.S. residents on worldwide income.
This Article in a Nutshell
The One Big Beautiful Bill Act in 2025 increases deductions, affecting H-1B visa holders’ tax returns. It raises standard deductions, extends mortgage interest limits, and lifts SALT caps, while immigration fees and enforcement tighten, altering financial and filing strategies for skilled foreign workers in the U.S.
— By VisaVerge.com
