Hey friends! If you’ve been hearing about Trump’s new “One Big Beautiful Bill” and wondering what it means for your wallet, here’s a quick breakdown. Taxes can feel super overwhelming, but I went through the details so you don’t have to. Here’s what’s changing and how it might affect you.
Tax Cuts Are Now Permanent
The lower tax rates from the 2017 tax law are officially here to stay. The standard deduction also got a boost. It’s now $15,750 if you file solo and $31,500 for couples. This could mean less of your income gets taxed upfront.
Personal exemptions are still not a thing, so that part hasn’t changed.
Some New Deductions (But Only for a Few Years)
There are a few temporary deductions running through 2028:
- Tip earners and people working lots of overtime may get to deduct a portion of that income.
- If you financed a U.S.-made car, some of the interest could be tax-deductible.
- Seniors aged 65+ might be able to deduct up to $6,000 from their income, depending on how much they earn.
These are only around for a few years, so it’s worth checking if you qualify while they’re active.
Bigger Child Tax Credit + New “Trump Accounts”
The Child Tax Credit got a slight bump, it’s now $2,200 per child, and might go up to $2,500 through 2028.
Also, there’s something new called “Trump Accounts” for babies born starting in 2025. The government will put in $1,000 at birth, and parents can contribute more over time. The account grows with interest, kind of like a savings or retirement fund for your kid’s future.
SALT Deduction Increased (Temporarily)
If you live in a high-tax area, good news the cap on the state and local tax (SALT) deduction is now $40,000 for couples earning under $500K. That limit goes up slightly each year until 2030, then goes back to the original $10,000 cap.
Social Security Tax Deduction for Seniors
There’s now a $6,000 deduction available for seniors receiving Social Security. It’s income-based, so not everyone will qualify, but it could help reduce taxable income for many older Americans.
Changes to Programs Like Medicaid and SNAP
The bill includes changes to funding for programs like Medicaid and SNAP. That may lead to some shifts in how these benefits are accessed or who qualifies in the future.
So… What’s the Overall Impact?
This bill brings a mix of permanent tax cuts, temporary deductions, and some updates to credits and savings options. It’s designed to support workers, families with kids, seniors, and certain taxpayers but the benefits depend on your income, lifestyle, and location.
