Big Beautiful Bill Act: What the New Tax Law Means for You

On the 4th of July, President Trump signed into law what’s officially called the One Big Beautiful Bill Act. Since then, headlines have been flying, talking heads are weighing in, and everyone seems to have a take. While we’re not here to make political calls or react to soundbites, we are here to help you sort through the noise and figure out how this law affects your financial life, now and in the years ahead.

Below is a straightforward breakdown of what’s changing, what to pay attention to, and what we’re doing about it on your behalf.

Tax Rules That Are Now Locked In

Back in 2017, the Tax Cuts and Jobs Act made major changes to tax brackets and deductions, those were set to expire soon. This new law makes most of them permanent:

  • Current tax brackets stay in place:

    • Current: (10, 12, 22, 24, 32, 35, 37%) vs

    • Would have sunset to: (10, 15, 25, 28, 33, 35, 39.6%)

  • The standard deduction increases to $15,750 for individuals and $31,500 for couples

For clients who itemize, the SALT (state and local tax) deduction jumps from $10,000 to $40,000 starting in 2025. That’s a meaningful shift for many high-income households in high-tax states. Keep in mind: that $40,000 cap phases down over time and starts to disappear for incomes over $500,000.

AMT Update: Permanent Relief, Tighter Thresholds

The new law makes the Alternative Minimum Tax exemption permanent and inflation-indexed, but it also lowers and steepens the phase-out threshold, meaning some households who have avoided AMT in recent years may find themselves back in it starting in 2025.

  • The increased exemption of roughly $88k single/$137k joint becomes permanent, and it will continue to climb with inflation, providing broader protection up front.

  • However, AMT exemption threshold declines to the 2018 levels, and will be phased out more quickly.

  • Large ISO exercises, sizable capital-gain harvests, or hefty muni-bond payouts may now trigger the tax sooner and at a steeper marginal rate than before.

We can help re-run 2025 projections before exercising stock options, harvesting gains, or doing Roth conversions to avoid surprise AMT hits.

Estate Tax Exemption Is Getting a Major Lift

This bill also raises the estate and gift tax exemption to $15 million per person ($30 million per couple) compared to $13.6 million in 2024. That opens the door to more efficient wealth transfers, gifting, and trust strategies.

We’ll review your estate plan over the coming months to help you make the most of this window, especially if there’s a risk of these limits being rolled back in a future administration.

For Business Owners and Investors

A few notable changes here:

  • The 20% QBI (Qualified Business Income) deduction continues, now with a higher phase-out threshold of $150,000 for joint filers

  • Bonus depreciation becomes permanent, allowing 100% write-offs in the year you place qualifying property into service

  • Opportunity Zones are expanded, opening up more options for tax-advantaged real estate or business investments

If you own a business, consult, or invest in real assets, these provisions may offer new planning opportunities.

Health, Retirement, and Social Security Impacts

Health Savings Accounts (HSAs) are now more broadly available and flexible:

  • You can now contribute if you’re in a high-deductible bronze or catastrophic plan

  • Funds can be used for direct primary care and pre-deductible telehealth services

There’s also a new deduction for retirees age 65 and older:

  • $6,000 for individuals earning under $75,000

  • $12,000 for couples under $150,000

This doesn’t eliminate Social Security taxation; however, it might reduce how much is taxed, depending on your overall income. That deduction phases out and expires after 2028.

Credits for Families, and a New Kind of Tax-Deferred Savings Account

  • The Child Tax Credit increases permanently to $2,200 per child

  • A new Child Savings Account launches in 2025 for babies born through 2028

Each account gets a $1,000 government seed, allows up to $5,000 in annual family contributions (plus $2,500 from employers), and grows tax-deferred. Withdrawals are taxed as long-term capital gains. This won’t be a fit for everyone, but it could be a useful tool for building next-generation savings in the right circumstances.

Green Energy Credits: Use Them or Lose Them

Many of the clean-energy incentives, such as those for electric vehicles, solar panels, and home efficiency upgrades, will start phasing out after 2025.

If you’re planning any of those upgrades, we should talk about timing. Once the credits are gone, the economics of those purchases will likely change.

What We’re Recommending

If we haven’t already covered this in a recent review, we will. But in the meantime, here are a few planning items we’ll be working through with clients this year:

Within the next 90 days

  • Update withholding and/or estimated tax payments to reflect 2025 brackets

  • Confirm HSA eligibility and max contribution strategy

By the end of 2025

  • Evaluate property tax prepayment if the new SALT cap creates room

  • Consider bonus depreciation on new business purchases or real estate upgrades

In early 2026

  • Review estate and gifting strategies to take full advantage of the higher exemption

Throughout 2025-2026

  • Revisit clean energy and vehicle purchase timing

  • Explore options for Child Savings Accounts if you have new family members on the way

The Bottom Line

We know these kinds of legislative changes can be overwhelming. They’re dense, they’re politicized, and most of the coverage is more heat than light.

That’s why we’re focused on what matters most: what this means for you.

As always, if you have questions we’re here to help. Feel free to reach out anytime, and if someone you care about is asking similar questions, feel free to forward this along. We’re always happy to be a resource.

Best,

Peter & Chris


Peter Hughes, CFA