“One Big Beautiful Bill”: How does it impact your financial plan?

Written By: Sarah Anderson, CFP®

The “One Big Beautiful Bill Act” was signed into legislature on July 4, 2025, and brings numerous changes to the United States tax code. Many of the 2017 Tax Cuts and Jobs Act changes were made permanent and some new tax changes were introduced. Let’s get into it.

Temporary Deductions (2025-2028)

• No taxes on tips or overtime – Tips up to $25,000 and overtime income of $12,500 for single filers and $25,000 for joint filers will not be taxable. (Phaseout limits apply)

• Increased deduction for seniors – Those over 65 can claim an additional $6,000 deduction. (Phaseout limits apply)

• Deductible car loan interest –Up to $10,000 in car loan interest can be deductible for vehicles whose final assembly took place in the United States. (Phaseout limits apply)

Additional Changes

• Tax rates extended – The reduced tax rates set in 2017 by the TCJA are made permanent.

• Permanent increase of the standard deduction – These will continue to be indexed for inflation.  For 2025, the standard deduction will be $15,750 single/ $31,500 married filing jointly.

• SALT deduction increase – the State and Local Tax (SALT) deduction cap increases to $40,000 for the next five years. (Phaseout limits apply)

• Estate and gift tax exclusion extended – The increased estate and lifetime gift exclusion amounts set by the TCJA are made permanent and will be inflation adjusted.

• Child tax credit is made permanent – The child tax credit has increased to $2,200 per child in 2025 and will be adjusted annually for inflation.

• Increased charitable deduction for non-itemizers – Taxpayers taking the standard deduction can now claim charitable donations up to $1,000 for single filers and $2,000 for joint filers.

• More uses for health savings accounts (HSAs) and 529s – Participants will have more types of health plans from which to choose and will also be eligible to use HSAs. Withdrawals from 529 education savings plans are expanded to cover a wider range of educational expenses.

• New type of savings accounts for children – A new savings account labeled a “Trump Account” can be opened in which parents or other individuals can make contributions up to $5,000 per year, where the funds grow tax-deferred until age 18. Parents of children born between 1/1/2025 and 12/31/2028 will qualify for $1,000 in funding to start the account.

Advisors at The Foundry will stay abreast of these, and other changes to keep your plan on track over the coming years.