What the One Big Beautiful Bill Means for You

By Brandon Miller –

The One Big Beautiful Bill Act (OBBBA)—yes, that’s really what it’s called—was signed into law on July 4, 2025, and it’s packed with changes. We’re talking permanent tax cuts, updates to Medicare and Medicaid, energy policy overhauls, even changes to immigration and defense spending. It’s a lot.

Rather than try to unpack all several-hundred pages of it, we’ve pulled out the most relevant highlights, especially the tax changes that could affect your planning.

A Quick Look at What’s Changing

1. Tax cuts that stick around
The lower tax rates from the 2017 Tax Cuts and Jobs Act are now permanent. That includes the Qualified Business Income (QBI) deduction and the current estate tax exemption—so no looming expiration dates to stress about. Of course, “permanent” really just means Congress didn’t give it an end date; they can still change things down the road.

2. Bigger standard deduction
Starting in 2025, the standard deduction jumps to:
• $31,500 for joint filers;
• $23,625 for heads of household;
• $15,750 for single filers.
These amounts will continue to adjust for inflation.

3. Charitable giving gets a shakeup
Beginning in 2026:
• For non-itemizers, you can now deduct up to $2,000 in cash donations if married filing jointly ($1,000 if single). This is similar to 2020 and 2021 when you were able to deduct $600/$300.
• For those who do itemize, only donations over 0.5% of your adjusted gross income count. Smaller gifts won’t make the cut.

4. Estate tax exemption expands
The estate tax exemption rises to $15 million per person in 2026 and will be indexed for inflation. No expiration on this one (for now).

5. Child tax credit boost
The child tax credit increases to $2,200 for 2025 and gets indexed to inflation. Income phaseouts stay at $400,000 for joint filers and $200,000 for single filers.

6. Green energy tax credits rolled back
A few clean energy incentives are on the chopping block:
• The $7,500 electric vehicle credit ends for cars bought after September 30, 2025.
• Residential energy credits (think solar panels or new windows) go away after December 2025.

7. 529 plan upgrades
529s now cover more K–12 expenses like tutoring, curriculum, and dual-enrollment college courses. The annual cap for K–12 withdrawals increases to $20,000 in 2026.
Bonus: You can also now use 529 funds for job training, credentialing, or licensing programs like HVAC certifications or CPA exams.

A Few More Notable (and Sometimes Temporary) Changes

State and local tax (SALT) deduction cap raised
For 2025, taxpayers earning under $500,000 can deduct up to $40,000 in SALT. That limit increases slightly each year until 2029, but reverts back to $10,000 in 2030.

No federal tax on tips (for now)
From 2025–2028, tip income won’t be federally taxed if you’re under the income threshold ($150K single/$300K joint). The IRS will release a list of “tipped” occupations before the end of 2025.

Overtime pay gets a break
Overtime earnings from 2025–2028 are tax-free up to $12,500 per person ($25,000 per couple), with the same income limits as above.

New “Trump Accounts” for newborns
Babies born from 2025–2028 to U.S. citizen parents will automatically get a $1,000 deposit into a federal savings account. Parents can contribute up to $5,000 annually, and the account grows tax-deferred.

Extra deduction for seniors
If you’re 65 or older, you’ll get an extra $6,000 deduction between 2025–2028 ($12,000 for couples). This starts to phase out at $75K income ($150K joint).

Deduct car loan interest
Buying a personal-use vehicle between 2025–2028? You can deduct the interest, provided the car was assembled in the U.S. (leases don’t count).

If you’re wondering how any of this might affect your situation, don’t hesitate to loop in your tax advisor for the nitty-gritty.

This material presented by Brio Financial Group (“Brio”) is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy, or investment product. Facts presented have been obtained from sources believed to be reliable, however Brio cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. This information may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those discussed. No investor should assume future performance will be profitable or equal the previous reflected performance. Any reference to an index is included for illustrative purposes only, as an index is not a security in which an investment can be made. They are unmanaged vehicles that serve as market indicators and do not account for the deduction of management fees and/or transaction costs generally associated with investable products. The S&P 500 Total Return Index represents U.S. stock returns. This includes 500 leading companies in the U.S. and is widely regarded as the best single gauge of large-cap U.S. equities, where dividends are reinvested. The holdings and performance of Brio client accounts may vary widely from those of the presented indices. Brio does not provide legal or tax advice, and nothing contained in these materials should be taken as legal or tax advice. Advisory services are only offered to clients or prospective clients where Brio and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.

Brandon Miller, CFP®, is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals. For more information: https://www.briofg.com/

Money Matters
Published on August 28, 2025