Trump’s “Big Beautiful Bill”: What It Means for You
On July 4th, President Trump signed the One Big Beautiful Bill (OBBB) into law - a sweeping tax reform that makes many provisions from the 2017 Tax Cuts and Jobs Act permanent and introduces several new tax breaks. As always, everyone’s situation is different, so this is meant as a quick overview. Feel free to reach out directly if you'd like to explore how this could apply to your specific planning.
Here are a few key highlights:
Personal Income Tax
- Keeps the lower tax brackets from 2017 (top rate stays at 37%)
- Keeps higher standard deductions; SALT deduction capped at $40,000 (phased out for higher earners)
- Mortgage interest deductibility rules remain as set in the TCJA
New Deductions
- Qualified tips: up to $25,000 starting in 2025 (phases out for higher incomes)
- Car loan interest: up to $10,000 (must be new loans after 12/31/24)
- Senior deduction: extra $6,000 ($12,000 for couples) for those age 65+ under certain income limits
- Qualified overtime: deduction of up to $12,500 ($25,000 joint) for 2025–2028
Trump Accounts
- New savings vehicle for children under 18; tax-deferred growth, tax-free for education, first home, or starting a business
- Government seeds $1,000 for newborns between 12/31/24 and 1/1/29
Business & Investment
- Makes corporate tax rate of 21% permanent
- Makes 20% deduction for pass-through income (199A) permanent, with slightly higher phaseouts
- QSBS (qualified small business stock): higher gain exclusions, higher asset cap, shorter holding period
Estate Planning
- Estate tax exemption increases to $15 million per person (indexed to inflation) in 2026
- Still worth reviewing life insurance coverage and trust strategies for closely held businesses and high net worth families
The bill is complex, and small details can make a big difference depending on your income, assets, and family situation. If you'd like to discuss how these changes might impact you - whether it’s income tax planning, business strategy, estate planning, or saving for kids - feel free to reach out.
I’d be glad to help you sort through what this means for your unique plan.