The “One Big, Beautiful Bill” (OBBBA) introduces a sweeping set of permanent and temporary tax changes that may significantly shape how you plan for the future. It is more than a political headline—it's a major tax law with real implications for earners across income levels, ages, and professions. If some of these updates feel confusing or overwhelming, you are not alone. The goal is to help you feel informed, supported, and ready to take proactive steps.
Lower income tax brackets from the TCJA are now permanent, and the thresholds have been adjusted. You may benefit from slightly wider ranges that keep more of your income in lower brackets.
The higher standard deduction continues and will rise annually with inflation. For many taxpayers, this offers a straightforward way to reduce taxable income without itemizing.
The Child Tax Credit has also been updated. The law outlines new refundable and nonrefundable amounts as well as income-based phaseouts. Depending on your household income, you may qualify for larger or more accessible benefits.
A new $10,000 car loan interest deduction could help if you're financing a vehicle assembled in the United States. Eligibility may vary, so reviewing your purchase details is key.
There is also a temporary tax break on up to $25,000 in tip income, which may benefit workers in service-based jobs. A formal list of eligible occupations is forthcoming, but this change could offer meaningful relief for many tipped employees.
The SALT (state and local tax) deduction cap has increased to $40,000, providing more room for taxpayers in high-tax states. Keep in mind, however, that phaseouts apply for higher-income earners.
A temporary $6,000 “Senior Bonus” deduction may offer extra relief for retirees who fall within certain income limits. If you're approaching or in retirement, this may help reduce taxable income.
The estate, gift, and generation-skipping transfer tax exemptions have been permanently increased to $15 million. This could give families and individuals more flexibility for long-term wealth planning.
Capital gains brackets will now adjust annually for inflation, which may help you stay within lower tax ranges depending on your investment strategy.
The law also extends permanent relief from the Alternative Minimum Tax (AMT). While higher-income earners may still see faster phaseouts, the long-term stability of this change offers clarity for planning.
Medicaid has undergone significant adjustments, including $1 trillion in funding cuts, new work or volunteer requirements, and stricter eligibility standards. These changes may impact coverage access for many households.
“Trump Accounts” have been created for eligible children, offering tax-advantaged growth and structured investment options. Contribution limits apply, making it helpful to evaluate whether this account type fits into your long-term financial planning.
Clean energy and electric vehicle (EV) tax credits will begin phasing out soon. If you're considering upgrades or a new EV purchase, acting sooner rather than later may help you qualify for remaining incentives.
The OBBBA touches nearly every type of taxpayer—families, investors, retirees, and high earners alike. Because the law includes a mix of temporary and permanent provisions, it’s wise to start reviewing your tax strategy now rather than waiting for filing season.
You may benefit from speaking with a financial advisor or tax professional who can walk you through how these changes apply to your specific situation. Staying ahead of these updates can help you make clearer, more confident decisions in the months ahead.
