On July 4th, Congress passed a new tax bill that will have an impact on many aspects of tax and financial planning. I’m going to break down the One Big Beautiful Bill (yes, that’s its actual name) to what matters most for the people I work with who are just like you!
Let’s get into it.
Couple things to clarify before diving in:
1. This blog is by no means an endorsement or condemnation of the bill. These are the new rules. My job isn’t to give political opinions. My job is to help the families that I serve reduce their lifetime tax liability so that more money stays in their pockets for them to use, not the Federal government.
2. You’ll see me call some changes “permanent” What that means is there is no planned expiration date of the rule. Congress could change them later, but them’s the rules until then.
I like to think of the bill in a couple of different categories:
- What’s going away
- What’s staying the same
- What’s new
What’s Going Away
Most of what’s “going away” are the expiration dates if this bill hadn’t passed. In that sense, this bill is mostly locking in the current rules instead of letting them roll back.
That said, there are some actual expiring credits to be aware of:
- Energy-Efficient Home Improvements
- Electric Vehicle Credits
- Solar Energy Credits
These are going away soon, so if you've been on the fence about making a move in any of these areas, your window is closing.
What’s staying the same
Marginal Tax Rates
- As I said earlier, had this bill not passed, marginal tax rates would’ve increased. These lower rates are now permanent:
- 12% (would’ve gone to 15%)
- 22% (would’ve gone to 25%)
- 24% (would’ve gone to 28%)
- 32% (would’ve gone to 33%)
- 37% (would’ve gone to 39.6%)
- This is arguably the biggest impact of the bill: avoiding a built-in tax hike.
Standard deduction
- The standard deduction would’ve also decreased next year. Instead, it will remain higher, and will actually increase from what was supposed to be in 2025
- Single: $15,740 (up from $15,000)
- Married Filing Jointly: $31,500 (up from $30,000)
And some other more niche things
- Estate Tax Exemption
- Alternative Minimum Tax (AMT) Exemptions
- Many business owner things (Most of my clients do not own a business, so I will leave those out)
What’s New
Senior Citizen Bonus deduction
- Those 65 and older get an additional $6,000 deduction per person from 2025-2028
- Phaseouts of $150,000 (MFJ) $75,000 (single)
- Social security is still taxed (contrary to popular belief), however with this deduction, ~90% of seniors’ social security will be tax-free
No tax on tips deduction
- This isn’t “no tax”, it’s a deduction for the money earned via tips. There is still FICA taxes due.
- Above the line deduction up to $25,000 (MFJ) or $12,500 (single)
- Phases out starting at $300,000 (MFJ) or $150,000 (single)
No tax on overtime deduction
- Same thing as tips
Car loan interest deduction
- Auto loans taken out in 2025-2028
- Up to $10,000 deduction for US-assembled vehicles (where to car is actually built, not the brand name)
- Phases out starting at $200,000 (MFJ) or $100,000 (single)
Trump accounts
- A new tax advantaged account for kids under 18 with $5,000 annual contribution limit
- IRS will fund $1,000 for kids born 2025-2028
- No distributions before age 18
- I’m not sold on how advantageous funding this account on your own would be compared to other options. Take that free $1,000 all day, but weigh your options before electing to make your own contributions.
Charitable for non-itemizers
- In 2026 you can deduct up to $2,000 (MFJ) or $1,000 (single) of charitable donations, even if you take the standard deduction when you file.
HSA expansion
- HSAs are available on more ACA plans
- Anyone who’s talked to me about HSAs knows that I am a huge advocate of these accounts when used strategically.
SALT deduction expansion
- The State and Local Tax (SALT) deduction increases from $10,000 à $40,000 (MFJ)
- Phaseouts start at $500,000
- Big win for people who live in high-tax states
Child tax credit
- Increases from $2000 to $2200 for each child under 17
- Will now have permanent inflation adjustment
Dependent care FSA
- Starting in 2026 annual contribution limit increases from $5,000 to $7,500
- Finally FINALLY this has gotten an increase. The $5,000 contribution limit was set in 1986 and hasn’t increased until now. If it had a 3% inflation increase, the limit should be almost $16,000.
- Daycare costs have gotten out of hand and I can’t believe this limit is still so low. But progress is progress. Take that discount on the additional $2,500.
529 Expansion
- 529 plans can now pay for K-12 expenses
Bottom Line
This isn’t a full list of the 870+ pages of tax law changes — but these are the ones that matter most for the families and professionals I serve.
In my opinion, the most important impact is that the bill prevents tax hikes that were scheduled to hit in 2026. That alone gives us more runway to plan.
Yes, there are some new deductions and tools to consider, but most of them won’t move the needle on their own. The big wins still come from coordinating all the pieces of your plan — taxes, investments, cash flow, and timing — in a thoughtful way.
Reach out if you want to chat about this, or more importantly, those real needle mover decisions and strategies.
Ryan Brueck, CFP®
P.S. If you want to…
- Spend more time doing the things you love
- Spend less time worrying about your financial future
- Feel confident you’re capitalizing on opportunities while minimizing potential threats
- Experience peace of mind about your financial security
Schedule a free, no-obligation introduction meeting with me without the worry of being sold something.
Still have questions?