The “One Big, Beautiful Bill” (OBBBA) brings a significant array of tax changes that can impact your financial planning. This isn’t just a political talking point; it’s a law that reshapes strategies across various income brackets, ages, and occupations. Here's what you need to know:

Income Tax, Deductions & Credits

The lower income tax brackets from the TCJA are now permanent, with adjusted thresholds. The higher standard deduction continues and is adjusted annually for inflation. The Child Tax Credit has seen changes, affecting refundable and nonrefundable amounts, with specific income-based phaseouts. New provisions include a $10,000 car loan interest deduction and a temporary tax break on up to $25,000 in tip income for eligible occupations. Additionally, the SALT deduction cap increase to $40,000 may offer relief in high-tax states, although it phases out for high earners.

Wealth Transfer, Investment & Retiree Provisions

There’s a temporary $6,000 “Senior Bonus” deduction based on income eligibility, and estate, gift, and generation-skipping transfer tax exemptions have permanently increased to $15 million. Capital gains brackets, adjusted for inflation, help investors remain in lower tax ranges, while permanent relief from the AMT could see quicker phaseouts for high earners.

Other Noteworthy Changes

Significant Medicaid changes include $1 trillion in funding cuts, and new work or volunteer requirements, with tighter eligibility. The introduction of “Trump Accounts” for children promises tax-advantaged growth, while clean energy and EV tax credits are soon phasing out, urging prompt action if considering purchases or upgrades.

The OBBBA is broad, affecting a wide spectrum from low-income families to wealthy retirees. It's essential not to wait until tax season to understand its impact. Start assessing your strategies now, especially considering both temporary and permanent provisions. Consulting a financial advisor is highly recommended for personal guidance.