One Big Beautiful Bill- Changes that may impact you

•  The bill referred to as the One Big Beautiful Bill Act, signed into law on July 4, 2025, made many of the Tax Cuts and Jobs Act tax breaks permanent.
• The legislation introduced a few new tax deductions available for certain taxpayers.
• Your financial advisor can help you understand how these changes affect you and make suggestions to adjust your plan accordingly.

Who is affected: All taxpayers

What the bill says: Tax rates established in TCJA will remain in place, meaning nearly all taxpayers will avoid a tax increase that would have kicked in at the end of 2025. The legislation provides more certainty about future tax rates, giving a clearer idea of what you’ll owe in taxes in the future.

 Who is affected: Those who claim the standard deduction (which includes the vast majority of taxpayers)

What the bill says: The bill makes TCJA’s increase of the standard deduction permanent and increases the deduction even further. The standard deduction for 2025 will be $15,750 (single or married filing separately), $23,625 (head of household) and $31,500 (married and filing jointly). The bill says the standard deduction will continue to be adjusted for inflation going forward.

 Who is affected: Any taxpayer who itemizes deductions on their federal tax return

What the bill says: The State and Local Tax (SALT) deduction, an itemized deduction of certain state and local taxes, was capped at $10,000, and had been scheduled to expire. The new law increases the cap to $40,000 for 2025 and $40,400 for 2026, followed by 1 percent increases annually in 2027, 2028 and 2029. The cap will revert to $10,000 in 2030. The deduction phases out for taxpayers with a modified adjusted gross income (MAGI) of $500,000 or more.

  Who is affected: Anyone who itemizes their tax deductions

What the bill says: The bill referred to as OBBBA permanently eliminates personal exemptions, which had been suspended under TCJA and would have returned in 2026. Coupled with the increased standard deduction, the elimination of personal exemptions in TCJA has led to fewer taxpayers itemizing deductions.

 Who is affected: Taxpayers with qualifying dependents

What the bill says: The Child Tax Credit amount increases permanently to $2,200 per child in 2026, with inflation adjustments going forward.  The refundable portion is capped at $1400. 

 Who is affected: Individuals who are repaying a mortgage, home equity loan or auto loan

What the bill says: The mortgage interest deduction will permanently max out at $750,000, and the TCJA home equity interest deduction rules (home equity must be used for a home improvement or acquisition to deduct the interest) are also made permanent. Individuals taking out loans for new cars can deduct up to $10,000 of new car loan interest per year as long as they meet the requirements. The auto loan interest deduction is for 2025 through 2028.

 Who is affected: High-net-worth individuals who have substantial estates

What the bill says: The exemption on estate and gift taxes increases to $15 million for individuals and $30 million for couples starting in 2026. The exemption adjusts for inflation annually starting in 2027.
 

 Who is affected: Taxpayers who make charitable donations and use the standard deduction

What the bill says: Starting in 2026, taxpayers who use the standard deduction can also deduct certain charitable contributions—up to $1,000 for single filers or $2,000 for married couples filing jointly.

 Who is affected: Tipped workers, including servers, wait staff and others, as well as those who receive overtime pay

What the bill says: Income earned from tips, up to $25,000, is now eligible for a tax deduction. The benefit phases out for single filers who make over $150,000 and married joint filers who make over $300,000. People who earn overtime are eligible to deduct up to $12,500, with the same phaseouts as above. Taxpayers who use the standard deduction can use these deductions, which are available from 2025 through 2028.

 Who is affected: Taxpayers who are at least 65 years old

What the bill says: The law creates a new $6,000 deduction for most seniors and a $12,000 deduction for joint filers for the 2025 to 2028 tax years. The deduction phases out at higher incomes.

 Who is affected: Individuals who qualify for tax-advantaged accounts to pay for dependent care

What the bill says: The amount of money a household can contribute to a qualified dependent care FSA increases from $5,000 to $7,500 per year starting in 2026.

  Who is affected: Individuals and families who use tax-advantaged 529 Plan education-savings accounts

What the bill says: The legislation expands the qualifying ways to use 529 plans to include more homeschool, vocational, postsecondary-credentialing and K-12 expenses up to $20,000. Previously, the plans focused on higher education as well as qualified K-12 education expenses of no more than $10,000.

 Who is affected: Guardians of minor children

What the bill says: A new type of account, a “Trump account,” will be available for minor children to begin saving. It is similar to a traditional (non-Roth) Individual Retirement Account (IRA), but it is not subject to the earning requirements of an IRA. The federal government will run a pilot program for qualifying children born in 2025 through 2028 providing a one-time $1,000 credit. Many questions remain on these accounts, including which financial institutions can hold them. No contributions can be made to Trump Accounts prior to July 4, 2026, so the Treasury Department will need to provide guidance before then.

  Who is affected: Individuals looking to take out and/or repay federal student loans

What the bill says: Numerous provisions in the bill referred to as OBBBA cap the maximum amount of federal student loans for individuals. Borrowers will now have a choice between two repayment plans: a standard repayment plan and a new income-driven repayment plan.

 Though it may look like a lot is changing, many of these changes extend tax provisions that were scheduled to expire at the end of the year, which created uncertainty when trying to plan. With clearer answers on what your future tax impact may be, you’re in a position to make decisions about how to plan for the future—and your financial advisor is ready to help.

Your advisor can help build a plan tailored to you that includes growth and protection strategies to help you meet your goals, now and in the future. They can help you identify blind spots and opportunities to get the most out of your money and get you to where you want to be.

• 37% for incomes greater than $626,350 ($751,600 for married couples filing jointly)
• 35% for incomes over $250,525 ($501,050 for married couples filing jointly) 
• 32% for incomes over $197,300 ($394,600 for married couples filing jointly) 
• 24% for incomes over $103,350 ($206,700 for married couples filing jointly) 
• 22% for incomes over $48,475 ($96,950 for married couples filing jointly) 
• 12% for incomes over $11,925 ($23,850 for married couples filing jointly) 
• 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly)

• 37% for incomes greater than $626,350
• 35% for incomes over $250,500
• 32% for incomes over $197,300 
• 24% for incomes over $103,350 
• 22% for incomes over $64,850 
• 12% for incomes over $17,000
• 10% for incomes $17,000 or less

Married Filing Jointly/Surviving Spouse: $30,000

Heads of Households: $22,500

Single: $15,000

Married Filing Separately: $15,000

Single Up to $48,350-0%,

$48,350 – $533,400-$15%,Over $533,400-20%

Married filing jointly Up to $96,700-0%, $96,700 – $600,050-15%, Over $600,050-20%

Married filing separately Up to $48,350-0%, $48,350 – $300,000-15%, Over $300,000-20%

Head of household Up to $64,750-0%, $64,750 – $566,7000-15%, Over $566,700-20% 

 Previous law: Businesses organized as sole proprietorships, LLCs and partnerships don’t pay corporate tax rates. Instead, the owners pay individual income taxes on their share of business income – they’re called pass-through business taxes. Those tax rates are the same as the individual income tax rates. New law: Business owners can take a 20 percent deduction on their pass-through business income, with limits for those earning above $157,500 (single) and $315,000 (married, filing jointly). 

Corporate tax rates remain at a flat 21%