What The US’ Proposed Tax Bill Could Mean For You!
What this new proposed tax bill could mean for you and your family!
What Is This Bill About?
The House of Representatives recently approved a sweeping tax and spending package known as the “One Big, Beautiful Bill”.
While it still faces a likely round of changes in the Senate, it’s worth exploring what the current version could mean for you.
Let’s walk through the highlights, what could change, and why now isn’t the time to make knee-jerk financial moves.
Key Tax Changes on the Table
If passed by the Senate in its current form, the bill would extend many of the provisions from the 2017 Tax Cuts and Jobs Act, with some new wrinkles:
1. Lower tax rates and a larger standard deduction continue:
The lower individual tax brackets set in the 2017 Act would be here to stay.
The standard deduction would get another boost—$1,000 more for single filers and $1,500 more for married couples filing jointly through 2028.
2. Larger child tax credit:
The Child Tax Credit would increase by $500 per child, bringing it up to $2,500.
3. Overtime and tips would be tax-exempt:
This is a noteworthy change for those heavily reliant on tips or still working part-time in retirement.
Wages from tips and overtime pay would not be taxed through 2028.
4. Introduction of “Trump” Accounts:
These new government-sponsored accounts would contribute $1,000 per child to be used for education or a first home purchase, similar in spirit to 529 plans but with broader applications.
Yes, this is actually the name mentioned in the bill.
5. A higher SALT deduction cap—for some:
The State and Local Tax (SALT) deduction cap which has been limited to $10,000, would rise to $40,000.
Only for those with income under $500,000.
Especially impactful for high-income earners and those in high-tax states like OR & CA.
6. New deductions:
Up to $10,000 in interest on U.S.-made vehicle loans could be deducted.
A Mixed Bag for Spending
While tax relief is the headline, the bill includes controversial spending cuts.
Medicaid and SNAP (food assistance) would face stricter work requirements.
Subsidized student loans would be eliminated. And funding restrictions would be placed on certain healthcare services.
These changes aren’t yet law, and may never be.
Even if the Senate does move forward with the bill, amendments are very likely. Some of the more extreme provisions could be scaled back or scrapped altogether to secure broader support.
What Should You Do Right Now?
As a Certified Financial Planner® professional, I always encourage clients to focus on what they can control. This bill (while newsworthy) shouldn’t change your financial plans today, especially since it has not been signed into law yet.
However, it’s a good reminder to:
Review your current tax strategy.
Could Roth conversions be even more advantageous if today’s lower brackets stick around?
Rethink student loan payment strategy
Your student loans (or your children’s) may be impacted by the bill, both your repayment plan and eligibility for loan forgiveness.
Revisit your charitable giving.
If MAGA accounts or new deductions gain traction, we may want to adjust how you give.
Evaluate your income sources in retirement.
If tips or part-time work play a role in your plan, some tax relief could be coming your way, but don’t count on it just yet.
Stay the Course, But Stay Informed
Critics of the legislation say that the bill would add trillions of dollars to our already immense debt total.
As with all legislation, the devil is in the details and the debate. This bill still has a long road ahead in the Senate, and changes are almost guaranteed. That said, it’s important to stay aware of what’s being proposed and how it could impact your broader financial picture.
I’ll continue to track this and share updates as they become available.
And as always, if you’d like to talk through what this might mean for your personal situation, feel free to reach out.
Have any questions about what you’ve read? Let’s talk about them!
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