On July 4, 2025, a new piece of legislation was signed into law: the “One Big Beautiful Bill Act.” In addition to extending many of the provisions from the 2017 Tax Cuts and Jobs Act (TCJA), the bill introduces new tax policies that may impact individuals, families, and business owners in meaningful ways.
While every financial situation is different, here are a few highlights from the bill—and how they could potentially factor into your financial plan.
Tax Rates and Deductions: More Predictability Ahead
- Federal income tax rates: The current individual tax rates will be made permanent and adjusted for inflation starting in 2026.
- Standard deduction: The increased deduction is also now permanent and will be indexed to inflation. For 2025, the standard deduction is:
- $15,750 for individual filers
- $31,500 for married couples filing jointly
- $23,625 for heads of household
- State and local tax (SALT) deduction: The cap increases from $10,000 to $40,000 starting in 2025, with gradual increases through 2029, before returning to $10,000. The deduction begins to phase out at higher income levels.
What this could mean for you: With more certainty around the tax brackets and standard deduction, we may have more flexibility when planning strategies like Roth conversions, tax-loss harvesting, or income threshold management. The increased SALT cap could also benefit those in higher-tax states.
Charitable Giving: New Options for Itemizers and Non-Itemizers
- Non-itemizers can now deduct up to $1,000 (single) or $2,000 (joint) for charitable donations.
- Starting in 2026, itemizers will see a 0.5% reduction in the amount of their charitable contributions that can be deducted.
What this could mean for you: If you regularly give to charity, we can help you determine how to maximize your impact and tax efficiency—especially if front-loading contributions or using a donor advised fund makes sense in your situation. For those with Required Minimum Distributions (RMDs) from IRAs, Qualified Charitable Distributions (QCSs) may be even more valuable as these are not taken as Itemized Deductions.
For Families with Children
- Child tax credit: The credit increases to $2,200 per child starting in 2025 and will adjust for inflation going forward.
- New “Trump accounts”: These tax-advantaged savings accounts for children under age 18 can be opened starting in 2026. Contributions aren’t deductible, and withdrawals are restricted until age 18, when the account becomes a traditional IRA.
- 529 plan expansion: More education-related expenses now qualify, including certifications and professional licenses. The annual cap on K–12 tuition expenses paid with 529 funds will increase to $20,000.
What this could mean for you: These changes may open up new planning strategies for funding a child’s future—whether you’re focused on college, career training, or long-term savings.
For Retirees and Seniors
- An additional standard deduction of $6,000 will be available for seniors age 65+ through 2028 (subject to income limits).
What this could mean for you: This enhanced deduction could impact how much of your Social Security income is taxable. We’ll help you evaluate whether adjustments to your income strategy are appropriate.
For High-Net-Worth Families
- Estate and gift tax exemption: The exemption will rise to $15 million per person ($30 million per couple) starting in 2026 and will be indexed to inflation.
What this could mean for you: This creates additional flexibility for gifting and estate planning, but the window could change with future legislation. If you’ve been considering wealth transfer strategies, this may be a good time to revisit your plan.
For Business Owners and Earned Income
- Qualified business income (QBI) deduction: The 20% deduction is now permanent.
- New deductions for tips and overtime: These apply through 2028 and are subject to income limits.
What this could mean for you: Whether you’re self-employed, a business owner, or have income from tips or overtime, we can help you explore whether these changes offer planning opportunities.
Embracing Change, Staying Grounded
Tax laws evolve, and while this bill makes several provisions “permanent,” it’s important to remember that future changes are always possible. That’s why we continue to focus on flexible planning—making thoughtful decisions that align with your goals today while remaining adaptable for tomorrow.
As always, if you have questions about how these changes may impact your personal plan, we’re here to help.
Disclosures: This blog is for informational purposes only and should not be considered tax or legal advice. Please consult your tax advisor for personalized guidance.
About the Author: Jeff Bernier
