Trump's Big Beautiful Bill & How it May Affect You
Congress recently passed a major piece of tax legislation—frequently referred to in the media as the “Trump Big Beautiful Bill”—that brings a range of changes to the tax code starting in 2025 and 2026. Below is a brief overview of the updates that may be most relevant to you.
Key Tax Updates
1. Individual Tax Rates Extended
Tax brackets and the higher standard deduction originally enacted in 2017 have been extended through at least 2029. Most taxpayers will continue to benefit from lower marginal rates and simplified filing.
Tax brackets and the higher standard deduction originally enacted in 2017 have been extended through at least 2029. Most taxpayers will continue to benefit from lower marginal rates and simplified filing.
2. Expanded SALT Deduction Cap
The cap on state and local tax (SALT) deductions will increase from $10,000 to $40,000 beginning in 2025. This is especially beneficial for clients who itemize and live in high-tax states. The increased deduction phases out for households with income above $500,000.
The cap on state and local tax (SALT) deductions will increase from $10,000 to $40,000 beginning in 2025. This is especially beneficial for clients who itemize and live in high-tax states. The increased deduction phases out for households with income above $500,000.
3. Senior Tax Deduction
Starting in 2025, individuals age 65 and older will be eligible for an additional $6,000 deduction—or $12,000 for married couples—intended to reduce or eliminate federal taxes on Social Security benefits. This deduction phases out gradually for individuals with adjusted gross income (AGI) over $75,000 and for joint filers over $150,000, and is fully phased out at $175,000/$300,000 respectively.
Starting in 2025, individuals age 65 and older will be eligible for an additional $6,000 deduction—or $12,000 for married couples—intended to reduce or eliminate federal taxes on Social Security benefits. This deduction phases out gradually for individuals with adjusted gross income (AGI) over $75,000 and for joint filers over $150,000, and is fully phased out at $175,000/$300,000 respectively.
4. “Trump Account” for Newborns
Children born between 2025 and 2028 will receive a $1,000 government-funded investment account. Parents, extended family, and employers can contribute additional amounts each year. While modest in initial size, this new vehicle is designed to promote early investment and long-term wealth accumulation.
Children born between 2025 and 2028 will receive a $1,000 government-funded investment account. Parents, extended family, and employers can contribute additional amounts each year. While modest in initial size, this new vehicle is designed to promote early investment and long-term wealth accumulation.
For Business Owners
1. Accelerated Depreciation Reinstated
The bill reinstates enhanced bonus depreciation rules, allowing business owners to fully expense qualifying equipment, vehicles, and other capital investments in the year they’re placed in service. This provision could create substantial tax savings for those planning large purchases.
The bill reinstates enhanced bonus depreciation rules, allowing business owners to fully expense qualifying equipment, vehicles, and other capital investments in the year they’re placed in service. This provision could create substantial tax savings for those planning large purchases.
2. QBI Deduction Extended
The 20% qualified business income (QBI) deduction for pass-through businesses such as LLCs and S-corps has been extended, continuing to benefit eligible business owners by reducing taxable income.
The 20% qualified business income (QBI) deduction for pass-through businesses such as LLCs and S-corps has been extended, continuing to benefit eligible business owners by reducing taxable income.
A Balanced Perspective
The bill includes a mix of provisions designed to benefit retirees, working families, and small business owners, though many of these changes are temporary and subject to phaseouts or future revision. Not everyone will be affected equally, and as always, the real impact will depend on your specific financial situation.
Let’s Stay Ahead of the Curve
I’ll be factoring these changes into our planning conversations as I meet with clients and review portfolios in the months ahead. If you’re wondering how the new rules may impact your situation—whether it’s your tax plan, retirement strategy, or business decisions—please feel free to reach out. I welcome the opportunity to discuss how we can optimize your financial plan going forward.
