A New Era of Tax Policy Begins

On July 3, 2025, Congress passed the One Big Beautiful Bill Act (BBB)—a sweeping tax reform package that extends and expands many provisions from the 2017 Tax Cuts and Jobs Act (TCJA). With President Trump expected to sign it into law over the July 4th weekend, the bill cements a new chapter in U.S. tax policy.

Let’s break down the most important tax changes—and what they mean for your financial planning.

📉 Individual Income Tax Cuts Made Permanent

The bill locks in the lower tax brackets introduced in 2018:

• - 10%, 12%, 22%, 24%, 32%, 35%, and 37% brackets remain in place.  Without this bill, these rates would have expired at the end of 2025.

📌 Planning Tip: If you were considering accelerating income into 2025 to avoid higher rates, you may now have more flexibility.

💵 Higher Standard Deduction

Starting in 2025, the standard deduction increases to:

• • $31,500 for married couples filing jointly
• • $23,625 for heads of household
• • $15,750 for single filers

These amounts will continue to be indexed for inflation.

🧾 SALT Deduction Cap Temporarily Raised

The controversial $10,000 cap on state and local tax (SALT) deductions is temporarily lifted:

• For 2025, the cap increases to $40,000. It will rise 1% annually through 2029
• In 2030, it reverts back to $10,000. High earners (AGI over $500,000) will see a 30% reduction in the cap based on excess income.

📌 Planning Tip: Taxpayers in high-tax states like NY, NJ, and CA may benefit from bunching deductions or accelerating payments before the cap drops again.

👶 Expanded Child Tax Credit

• The Child Tax Credit increases to $2,200 per child. The refundable portion is capped at $1,400. Both the taxpayer and child must have Social Security numbers to qualify.
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🏛️ Estate and Gift Tax Exclusion Raised

• The federal estate and gift tax exclusion increases to $15 million per individual (indexed for inflation), effective for deaths in 2026 and beyond. 

📌 Planning Tip: High-net-worth individuals should revisit estate plans to take advantage of the increased exemption before any future changes.

🧠 What This Means for Taxpayers

• • Most Americans will avoid a tax hike that was scheduled for 2026.
• • High-income earners may still face limitations on deductions.
• • Families benefit from a larger standard deduction and child tax credit.
• • Estate planners have new opportunities to transfer wealth tax-efficiently.
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✅ Final Thoughts

The “Big Beautiful Bill” is the most significant tax legislation since 2017. Whether you’re a wage earner, investor, or business owner, these changes could impact your tax strategy for years to come.

📌 Need Help Adjusting Your Tax Plan?

We can help you navigate the new rules and optimize your tax position under the BBB Act.

👉 Schedule a tax planning session
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