If you’ve been wondering what the new “Big Beautiful Bill” in Washington means for you, your family, and your wallet, don’t worry, we’ve got you covered. This new legislation brings some big changes to taxes, savings, and even student loans. Here’s a simple breakdown of the key points that could actually impact your life.
Tax Cuts & Deductions
Bigger Standard Deduction: Starting in 2026, the standard deduction increases to $15,750 (single), $31,500 (married), and $23,625 (head of household), with future inflation adjustments. This reduces taxable income for most Americans, helping lower annual tax bills automatically.
Increased Estate Tax Exemption: If you’re fortunate enough to have significant wealth, you can now pass along up to $15 million (or $30 million for couples) without paying estate taxes.
No Tax on Tips & Overtime: Through 2028, the first $25,000 in tips and $12,500 in overtime pay will be tax-free if you earn under $150,000 (or $300,000 for married couples). Service workers and those working extra hours get to keep more of what they earn.
Higher SALT Deduction: The deduction cap for state and local taxes (SALT) jumps from $10,000 to $40,000, with 1% annual increases through 2029. Homeowners and taxpayers in high-tax states will benefit by being able to deduct more from their federal taxes.
Extra Tax Break for Seniors: If you’re 65 or older, you’ll get an extra $6,000 deduction on top of the regular standard deduction if your income is under $75,000 (single) or $150,000 (married). That means lower taxes for many retirees.
Auto Loan Interest Deduction: Buying a new car assembled in the USA? You can deduct up to $10,000 a year in interest on the loan, as long as you meet income requirements.
Charitable Giving Made Easier: Even if you don’t itemize your deductions, you can still write off up to $2,000 (married) or $1,000 (single) in charitable donations. This encourages charitable giving by allowing a small tax break for everyone, not just those who itemize.
Families & Kids
Higher Child Tax Credit: The Child Tax Credit increases to $2,200 per child starting in 2025 (a $200 increase from last year), with annual inflation adjustments. Families with children will see slightly larger tax savings each year.
529 Plans Get More Flexible: 529 education savings accounts can now be used for additional K-12 expenses like tutoring, test prep, and homeschool materials—not just private school tuition. This gives parents more flexibility to support their child’s education at any level.
Newborn Savings Accounts: Babies born between 2025 and 2028 will get $1,000 from the government to start a “Trump” savings account. Parents can add up to $5,000 a year to this special account, which grows tax-deferred.
Service Cuts & Reductions
Cuts to Medicaid, Healthcare, and SNAP: Stricter eligibility rules mean some families may lose access to Medicaid, Marketplace health insurance, or food assistance. This is something to watch closely if you or someone you know relies on these programs.
Student Loan Changes: Borrowers will have only two federal repayment options: a standard plan or a new income-based “Repayment Assistance Plan” (RAP). There are also new borrowing caps for students and parents. This simplifies repayment but could limit flexibility and increase payments for some borrowers.
No More Energy & EV Tax Credits: Starting in 2026, you won’t be able to claim tax credits for things like new energy-efficient windows. Biden’s tax credit for electric vehicles is set to expire on September 30th of this year. So if you’ve been considering home upgrades or an EV, you might want to act soon.
The Bottom Line:
The “Big Beautiful Bill” brings some real changes that could affect how much you pay in taxes, how you save, and how you plan for the future. While some of the updates are helpful (more tax deductions, savings for kids), others take away popular credits or limit safety nets.
As always, if you’re not sure how these changes apply to you, we’re here to help. Reach out any time. We’d love to chat and help you make the most of what’s new.
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