What the new tax bill means to your wallet

This is an important update following the signing of the One Big Beautiful Bill Act (OBBBA) on July 4. This new law introduces a wide range of permanent and temporary tax changes that may impact your financial planning, tax liability, and savings strategy. Here’s a summary of some of the most relevant provisions and what they could mean for you:

Key Permanent Changes:

Standard Deduction Increased and Made Permanent

  • $15,750 for single filers
  • $31,500 for married couples filing jointly

Marginal Tax Brackets Made Permanent

  • The existing rates - 10%, 12%, 22%, 24%, 32%, 35%, and 37% - are now permanent.

Estate and Gift Tax Exemption Increased

  • Starting in 2026, the exemption amount increases to $15 million per individual ($30 million for married couples), indexed for inflation.

Mortgage Interest Deduction Locked In

  • The $750,000 limit on mortgage debt for interest deduction is now permanent. Deductibility of mortgage insurance premiums is reinstated (starting in 2026), and interest on home equity loans remains non-deductible.

Charitable Deduction for Non-Itemizers

  • Beginning in 2026, individuals who do not itemize deductions can claim a charitable deduction of up to $1,000 ($2,000 for married couples).

Qualified Business Income (QBI) Deduction Extended

  • The 20% deduction for pass-through entities (sole proprietors, LLCs, S-Corps) is now permanent. A new minimum deduction of $400 also applies to individuals with at least $1,000 in qualified business income.


Temporary Provisions (2025–2028):

SALT Deduction Expanded - The cap on state and local tax deductions increases from $10,000 to $40,000 in 2025, with slight increases through 2029. However, this benefit phases out for higher earners:

  • The cap is reduced for those with modified adjusted gross income (MAGI) above $500,000
  • The deduction never drops below $10,000
  • In 2030, the cap reverts to $10,000

Senior Tax Deduction

  • A new $6,000 deduction is available to individuals age 65 or older ($12,000 for qualifying couples). Begins to phase out at $75,000 MAGI (single) and $150,000 (joint)

Tip Income Deduction

  • Tipped workers may deduct up to $25,000 in cash tips from taxable income each year through 2028. Benefit phases out starting at $150,000 MAGI (single) and $300,000 MAGI (joint)

Overtime Pay Deduction

  • Workers may deduct up to $12,500 in qualified overtime compensation ($25,000 for married couples). B enefit phases out starting at $150,000 MAGI (single) and $300,000 MAGI (joint)

Car Loan Interest Deduction

  • Interest on loans for new personal-use vehicles assembled in the U.S. is deductible, up to $10,000 annually. Benefit phases out starting at $100,000 MAGI (single) and $200,000 MAGI (joint)


Provisions for Families and Future Planning:

New “Trump Accounts” for Children (Starting 2026)

  • Up to $5,000/year can be contributed to a new tax-deferred account for children under 18
  • Children born between 2025 and 2028 receive a $1,000 government contribution
  • Distributions restricted until age 18
  • Child must be a U.S. citizen with a Social Security number

Expanded 529 Plan Use

  • Families can now use up to $20,000 annually for qualified K-12 education expenses, including books, tutoring, testing fees, and more.

These changes create new opportunities for tax planning, saving for education and retirement, and optimizing income. If you'd like to talk through how this might affect your specific situation we are here to help!