On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law by President Trump. This sweeping legislation makes permanent some of the most significant tax cuts from the 2017 Tax Cuts and Jobs Act and introduces several new deductions and policy changes that could impact your financial strategy for years to come.
As your advisor, I’ve outlined the key changes below and how they might affect your income, tax planning, retirement, and more.
🔧 Permanent Tax Relief and Bigger Deductions
The bill locks in the individual tax rates from the 2017 TCJA, which were set to expire at the end of 2025. That means continued lower rates for most taxpayers.
In addition, the standard deduction increases in 2025 to:
$15,750 for single filers
$23,625 for heads of household
$31,500 for married couples filing jointly
These amounts will be indexed for inflation moving forward.
👴 New Senior Deduction (2025–2028)
If you’re 65 or older, you may qualify for a new $6,000 senior deduction, which begins to phase out at $75,000 for single filers and $150,000 for joint filers.
💼 Worker-Friendly Tax Breaks (Temporary but Valuable)
From 2025 to 2028, individuals can deduct:
Up to $25,000 in qualified tips
Up to $12,500 in qualified overtime pay (or $25,000 for joint filers)
These deductions phase out for higher-income earners, so proper income planning will be important.
🚗 Car Loan Interest Is Now Deductible—With a Catch
You may now deduct up to $10,000 in interest on loans for new, U.S.-assembled personal-use vehicles purchased after 2024. This applies even if you don’t itemize, but the deduction phases out starting at $100,000 MAGI for single filers ($200,000 for joint).
🏠 SALT Deduction and Charitable Giving Expanded
SALT deduction increases to $40,000 for households earning under $500,000 through 2029
Charitable contributions: Non-itemizers can deduct up to $1,000 (single) or $2,000 (joint) starting in 2026
👨👩👧 Family and Estate Planning Updates
Child tax credit increases to $2,200 per child (indexed for inflation)
Estate and generation-skipping transfer (GST) tax exemptions both increase to $15 million in 2026, and will adjust for inflation going forward
🎓 Major Overhaul of Student Loans
If you or your children are considering graduate or professional education, note:
Lifetime borrowing caps: $100,000 for graduate students, $200,000 for doctoral/professional programs
Parent PLUS loans now capped at $65,000 per student
Repayment: Income-driven repayment is eliminated; replaced by a 10-year standard or 30-year RAP plan
⚠️ Other Notable Policy Shifts
New 1% tax on international remittances
Medicaid: Federal work requirement of 80 hours/month now applies
SNAP benefits: Tighter eligibility and new penalties for state error rates
Green energy credits: Most have been repealed, with a pivot toward fossil fuel support
🧠 What This Means for You
Whether you're planning for retirement, evaluating charitable giving, buying a car, or funding education, the OBBBA creates opportunities—but also potential risks. Many of the deductions and credits are temporary or income-limited. Others, like changes to entitlement programs or estate tax thresholds, may call for a deeper strategic review.
🤝 Let’s Talk Strategy
Navigating these changes effectively means aligning your financial plan with the new tax landscape. If you have questions or want to explore how the OBBBA might affect your situation, let’s schedule time to discuss.
As always, I’m here to help you stay informed and make confident financial decisions.