Buckle up. Congress has passed the One Big Beautiful Bill Act, a legislative casserole packed with tax changes, spending cuts, new deductions, and a few side plot twists for good measure. It’s part helpful, part confusing, and definitely something worth unpacking.
So, what’s actually in this thing, and what could it mean for you and your finances? Let’s break it down.
The Good Stuff
1. Permanent Tax Cuts
The 2017 tax cuts are no longer temporary. Lower tax rates and a higher standard deduction are now permanent, at least until the next round of changes.
Why this matters: more take-home pay and fewer surprises come tax time.
2. Deductions for Tip & Overtime Income
If you earn tips or work a lot of overtime, you can now deduct up to $25,000 in tip income and $12,500 in overtime but only through 2028.
Heads up: these benefits phase out for higher earners.
3. Extra Deduction for Retirees
If you’re 65+ and in certain income brackets, you get an additional $6,000 deduction through 2028.
4. SALT Deduction Cap Increased
For folks in high-tax states, the $10,000 SALT cap has been temporarily bumped up to $40,000 but only if your income is under $500,000.
5. Small Business Incentives
If you own a business, you’ll want to pay attention to these:
✔️ 100% expensing for equipment and capital investments is now permanent
✔️ The qualified business income deduction gets a boost
Bottom line: if you’ve been considering expanding or upgrading, this could be a good time.
6. Child Tax Credit Gets a Small Bump
In 2025, the Child Tax Credit increases by $200, with future adjustments for inflation. Not huge, but it adds up.
7. New “Trump Accounts” for Kids
This is a new savings tool for kids born through 2028:
✔️ $1,000 government deposit to start
✔️ Up to $5,000/year in family contributions
✔️ Grows tax-deferred until age 18
The “One Big Bill” Part, What’s Supposed to Get Easier
One Federal Bill to Rule Them All
Starting in 2025 (in pilot form), you’ll start seeing a single federal bill for things like student loans, Medicare premiums, and IRS payments.
Why this could help:
✔️ One due date
✔️ Real-time tax estimates and repayment info
✔️ Less juggling, fewer missed payments
Simplified Billing for Healthcare & Loans
A new federal billing system will combine ACA, Medicare, and federal student loan bills in one place. It should (hopefully) reduce confusion and speed up things like income-driven repayment updates.
And Then There’s the stuff people may not like
Cuts to Medicaid and SNAP
Eligibility is tightening for both programs. Stricter work requirements mean fewer people may qualify.
Green Energy Tax Credits Are Shrinking
If you were planning on buying an EV or installing solar panels for the tax break, double-check the new rules, many credits are being reduced or eliminated.
Changes to Student Loan Repayment
Some income-driven repayment plans and subsidies may be going away. If you have student loans, this is definitely worth keeping an eye on.
Debt Ceiling Raised by $5 Trillion
What it means for you:
✔️ Possibly higher interest rates
✔️ Potential pressure on inflation
✔️ Could impact mortgages, loans, and investment performance
What This Means for Your Portfolio
Inflation & Rates
Tax cuts and more government spending could lead to inflation. I’m watching this closely.
Winners & Losers
Winners: manufacturing, construction, small business, defense
Losers: renewable energy, possibly some corners of healthcare
Planning Tip
This is a good time to review:
✔️ Your tax strategy
✔️ Investment allocation
✔️ Student loan plan
✔️ Estate or college savings strategy
Final Thoughts
The One Big Beautiful Bill Act is part tax reform, part simplification, part political Frankenstein. Some changes are permanent, some expire in 2028, and others may shift depending on who’s in charge after the next election cycle.
As always, I’m here to help you make sense of how these changes impact you directly. If you want to review your plan or talk through any of this in more detail, just reach out.
And seriously, don’t try to read the full bill without coffee.