What the “One Big Beautiful Bill Act” Could Mean for Your Finances

On July 4th, the “One Big Beautiful Bill Act” (OBBB) was signed into law. After last-minute negotiations in Congress, the bill passed with sweeping changes to tax policy, federal spending, and savings initiatives. Below is a summary of provisions that may impact individuals and families.

Key Tax Changes for Individuals

1. Tax Brackets Stay the Same in 2026

The scheduled increase was avoided. Brackets remain at: 10%, 12%, 22%, 24%, 32%, 35%, 37%

2. Standard Deduction Increase (Starting 2025)

• +$750 for individuals

• +$1,125 for heads of household

• +$1,500 for joint filers

  
  

  This increase is now permanent.

3. Deductions for Tipped and Overtime Workers (2025–2028)

• Tipped wages: Up to $25,000 deductible

• Overtime: Up to $12,500 deductible

• Income limits: $150,000 individual / $300,000 joint

4. Additional Deduction for Seniors (2025–2028)

• +$6,000 per filer over age 65

• Phases out at $75,000 individual / $150,000 joint

5. SALT Deduction Cap Raised

• Increased to $40,000 starting in 2025

• Phases out above $500,000 income

• Indexed annually by 1%

• Expires in 2030, reverts to $10,000

6. Estate and Gift Tax Exemption Raised

• $15 million per person / $30 million per couple

• Adjusted annually for inflation

• Permanent

7. Auto Loan Interest Deduction (2025–2028)

• Up to $10,000 deductible for new U.S.-assembled vehicles

8. Clean Energy Credits Ending

• EV credits end after Sept 30, 2025

• Home energy improvement credits end Dec 31, 2025

9. Cap on Itemized Deductions for High Earners

• 37% bracket capped at 35% deduction benefit

• SALT deduction capped at 32% for high earners

10. Pass-Through (QBI) Deduction Made Permanent

• 20% deduction for eligible business income continues

 

Other Provisions to Know

Medicaid, SNAP, and Green Energy Cuts

• Nearly $1 trillion in reductions

• Includes new work requirements and phased-out subsidies

Business Incentives Expanded

• Full expensing for U.S.-based manufacturing and R&D

• Permanent tax breaks for domestic production

New “Trump Accounts” for Kids (2025–2028 Births)

• Contribute up to $5,000/year after tax

• $1,000 federal seed money

• Half accessible at age 18 for education, home, or business

• Withdrawals taxed at long-term capital gains rates

Boost to Defense and Immigration Spending

• $150 billion for military and border security

• Funding includes new border wall and state reimbursements

What About the Deficit?

CBO Estimates:

• Current policy method: adds $400 billion

• Traditional law method: adds $3.4 trillion

White House Estimates:

• Traditional method: reduces deficit by $755 billion

• With full policy assumptions: up to $5 trillion in reduction

• Using Congressional method: projects up to $8.8 trillion in long-term savings

If you'd like help reviewing how these changes might affect your financial plan, feel free to reach out. We're here to support informed decisions.

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Disclosure:The content presented herein is provided for informational and educational purposes only and should not be construed as personalized investment, legal, or tax advice. Hillside Wealth and Keating Financial Advisory Services, Inc. (“KFAS”) do not provide tax or legal advice. Please consult with your tax advisor or attorney regarding your specific situation.

No assurance can be given that any strategy, analysis, or recommendation discussed will be successful or achieve any particular investment or financial goal. All investments involve risk, including the potential loss of principal. KFAS is a Registered Investment Advisor registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.

This post is based on information available as of July 2025. Tax laws and financial regulations are subject to change, and future updates may alter the applicability of the information presented herein.