
The One Big Beautiful Bill is now law
After considerable wrangling, Congress passed the One Big Beautiful Bill and President Trump signed it into law. As we noted before, the new tax law meets President Trump’s campaign promise to make provisions of the 2017 Tax Cut and Jobs Act or “TCJA” permanent; it also adds some new provisions. We updated our abbreviated summary of the new bill at the bottom of this post.
What is the Impact of New Tax Law?
This example on how the new tax law did not result in simplification is worth repeating:
Assessing the impact and planning – The increase in the deduction allowed for state and local tax or “SALT” to $40,000 could reduce taxes for many, allowing them to include more state and local taxes when they itemize. But, the impact is blunted because the standard deduction also increased (you take the larger of the two). Then the benefit of itemized deductions is reduced when you hit the 37% bracket. The above-the-line charitable deduction also reduces the impact of itemizing. And increasing the SALT deduction could mean you owe the Alternative Minimum Tax or “AMT.” In other words, you have to run tax projections to determine the best action.
Bunching – In previous posts, we have advised bunching of deductions into a single year so you can optimize itemizing. That planning may be both more important and tougher to do as you now have to watch state and local taxes as well as charitable contributions.
New or enhanced provisions – There are many new provisions that you need to review to see if they could affect you and determine if you qualify and need to act. The new Trump account provides an alternative to 529 plans for young families saving for children. And access to health savings accounts (HSAs) for seniors could provide a new resource for planning.
Expiring credits – The expiration of electric vehicle credits and energy-efficient home credits means that you need to act this year if you were considering those purchases.
You may see benefits from the final tax law, but extracting the full amount will require careful planning.
In the meantime, please contact us if you have any questions and good luck!
Steven

A Quick Summary:
The new law will keep the same tax rates and AMT exemption.
It increases the state and local tax or SALT limit to $40,000, but then cuts it back for income over $500,000.
It extends the standard deduction from TCJA with a temporary increase to $32,000 for married filing joint taxpayers or “MFJ” for 2025 through 2028 and adds a $6,000 bonus standard deduction for taxpayers over 65, but this phases out for income of $150,000 to $250,000 for MFJ.
There is now a above-the-line deduction for up to $25,000 of qualified tip income and $12,500 for qualified overtime, if your income is below the related caps.
The new law restores the “above the line” deduction for up to $2,000 to a charity for married couples or $1,000 for all others.
The new and used electric vehicle or EV credits end September 30, 2025; the credits for energy efficient homes end December 31, 2025.
The dependent care credit is increased to $7,500 in 2026.
It temporarily increases the child credit from $2,000 to $2,200 through 2028, subject to the same phaseouts as the current law.
You can deduct up to $10,000 of car loan interest for new cars with final assembly in the US, but with a phaseout for income over $200,000.
You can contribute up to $5,000 per year into a new Trump account for a child until through age 18 which can then be used for education, business or a new home. Employers can contribute up to $2,500 which is excluded from the employee’s taxable income. Qualified distributions are subject to capital gains tax while all other distributions are subject to ordinary rates plus 10%.
Adoption credits are expanded as are allowed contributions to ABLE accounts. Roll overs from tuition plans to ABLE accounts are allowed. Qualifications for tax-free distributions from 529 plans are expanded.
Seniors receiving Medicare can contribute to health savings accounts or HSAs if they have a high-deductible health insurance plans. This is a great way for tax sheltered growth to cover future bills. The new law allows taxpayers and spouses to make catchup contributions.
The bill adds 1% tax on remittances by non-US Citizens for transfers out of the USA.
The rule for 1099-K reporting finally goes from $600 to $20,000 and 200 transactions while 1099NEC reporting goes from in excess of $600 to $2,000.
A new credit up to $1,700 is allowed for qualifying contributions to 501(c)(3) organizations that grant scholarship.
A new tiered structure was added for tax on qualified small business stock gains.
Losses on gambling are limited to 90% of winnings.
The QBID stays at 20%.
And estate planning:
The estate and gift tax credit rises to $15 million in 2026. As we pointed out in a post a while back, fewer people will owe estate taxes so more may want to work on the income taxes due after their deaths, utilizing the step up in basis to shelter gains.