After slogging through 887 pages of the freshly signed One Big Beautiful Bill, I boiled it down to what actually matters for your household budget and long‑term plan. Below is the plain‑English version—what changed, what didn’t, and where the smart planning moves are.
Tax Code Simplified (And Stabilized)
Income-tax brackets are permanent:
The current marginal rates (10%, 12%, 22%, 24%, 32%, 35%, 37%) are now locked in—with one extra year of inflation indexing. No more 2026 “tax cliff,” so planning moves like Roth conversions or gain harvesting are easier to model.
Bigger and lasting standard deduction:
The doubled standard deduction is now permanent and bumped for 2025 to $15,750 (single/MFS) and $23,625 (head of household), with normal CPI indexing thereafter. Annual “do the math” checks still matter—some itemizers may want to toggle.
Personal exemptions—permanently eliminated:
Personal exemptions stay gone, but see the new (temporary) senior deduction below. Update paycheck projections and withholding tools accordingly.
Time-Sensitive Opportunities (2025–2028)
Temporary senior deduction:
Through 2028, taxpayers age 65+ can claim an extra $6,000 per filer ($12,000 per couple) as a deduction, phased out 6% above $75,000/$150,000 of modified AGI. Great tool to offset RMDs or part‑time income.
Car-loan interest is deductible again:
For 2025–2028 only, up to $10,000 of interest on qualifying first‑lien car loans for U.S.-assembled vehicles is deductible. The benefit phases out starting at $100K/$200K of MAGI. VIN reporting is required—don’t miss that box.
Family & Future Planning
Enhanced and permanent Child Tax Credit:
The $2,000 credit and expanded phase-outs are now permanent, with a bump up to $2,200 per child in 2025, then indexed annually for inflation. A valid SSN is now required for both parent and child.
New “TRUMP” Accounts for kids:
Children born Jan 1, 2025 – Dec 31, 2028 receive $1,000 in a tax-deferred account. Contributions (up to $5,000/year) grow tax-free and are restricted until age 18. Ideal for legacy planning and intergenerational wealth transfers.
529 Plan Enhancements:
Annual K–12 withdrawals now up to $20,000, including broader educational expenses. The $35K Roth IRA rollover is also codified. Double-check your state’s conformity.
Deduction Updates to Watch
SALT cap expands:
The cap becomes $40,000 in 2025 ($40,400 in 2026) and then adjusts by 1% annually through 2029. Married filing separately get half. Itemizing might make sense again—up to a point.
Mortgage interest cap remains, PMI now counts:
The $750K mortgage debt cap is made permanent. Private mortgage insurance premiums are explicitly deductible as interest going forward.
Charitable giving revised:
Non‑itemizers can deduct up to $1,000 ($2,000 MFJ) in cash gifts each year starting in 2026. For itemizers, a new 0.5% AGI floor starts in 2026—plan to bunch gifts or use a donor‑advised fund when it’s efficient.
We understand that legislation changes may impact your financial plan and we are here to be a resource for any questions you may have. If you are not currently working with an advisor, get in touch with our team by filling out our Discovery Questionnaire to schedule a 30-minute introductory call. We would love to discuss your legacy, values, and goals to determine if Harvest Point® would be a good fit to help you accomplish them.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Sources:
- Tax Foundation
- Ways and Means
- Kiplinger
- Stinson