On July 4th, President Trump signed the “One Big Beautiful Bill Act” (BBB) into law, introducing wide-ranging changes to areas such as taxes, benefits, and savings. While much of the discussion has been political, our focus is on what it means for your financial plan.
Below is a summary of key provisions that could impact individuals and families across a variety of situations. While not all changes will apply to everyone, we encourage you to share this information with anyone it may benefit.
Changes to Tax Deductions and Exemptions
– Standard deduction increases:
– Single filers: $15,750
– Married couples filing jointly: $31,500
These amounts will now adjust annually with inflation.
– SALT (State and Local Taxes) deduction cap:
Increased from $10,000 to $40,000, with a 1% annual increase until 2030, after which the cap reverts back. A phaseout begins for incomes over $500,000.
– Estate and gift tax exemption:
– Individuals: $15 million
– Married couples: $30 million
These changes are especially relevant for those doing estate planning or with significant property or investment assets.
Tax Credit Adjustments
– Child Tax Credit:
Permanently raised from $2,000 to $2,200 per child under 17.
– Green energy credits:
Credits for electric vehicles and home energy improvements will expire:
– EV credits end September 30, 2025
– Energy-efficiency credits end December 31, 2025
If you’re planning energy-related purchases, it may make sense to act soon.
A New Deduction That Could Affect Social Security Taxes
A temporary tax deduction for seniors has been introduced:
– Individuals 65+ with income ≤ $75,000 can deduct $6,000
– Married couples with income ≤ $150,000 can deduct $12,000
– Phases out completely at $175,000 (individual) and $250,000 (couple)
While this doesn’t change how Social Security benefits are taxed directly, it may reduce taxable income enough to make those benefits partially or entirely tax-free for some. This deduction is set to expire after 2028.
New Child Savings Accounts
For children born between 2025 and 2028, families can now open new tax-advantaged savings accounts:
– One-time government deposit: $1,000
– Annual contribution limits:
– Parents/relatives: $5,000
– Employers: $2,500
– Growth is tax-deferred until age 18; withdrawals taxed as long-term capital gains
These accounts could help with future education or other goals, but they come with strict rules. Let’s review your options before moving forward.
Final Thoughts
The One Big Beautiful Bill Act touches many areas that influence retirement planning, taxes, savings, and family finances. Not all provisions will apply to everyone, but for many of our clients, the impact will be real.
We’ll continue to analyze the bill in detail and update you with any relevant guidance. In the meantime, if you have questions about how the new law affects you or your loved ones, don’t hesitate to reach out.
