Congress has passed a sweeping new law — officially titled the Tax Relief for American Families and Workers Act, but often referred to as the “One Big Beautiful Bill.” This legislation brings substantial changes to tax policy, healthcare savings, education support, and generational wealth programs.
We are reviewing these changes closely to help you stay proactive, informed, and in control of your financial plan.
Here’s a breakdown of the most important updates:
Tax Updates: Lower Rates, Bigger Deductions
- Tax Rates Locked In: Current brackets (12%–37%) are made permanent.
- Standard Deduction Increased:
- $31,500 for joint filers
- $15,750 for single filers
- SALT Deduction Cap Raised:
- From $10,000 to $40,000, with a 1% annual increase through 2029 before reverting.
- “Senior Bonus” Deduction:
- An additional $6,000 deduction for qualifying seniors, through 2028.
- Child Tax Credit Increased:
- From $2,000 to $2,200 per child, indexed for inflation.
- Tip Income Deduction:
- Workers earning under $150,000 may deduct up to $25,000 in tip income, through 2028.
- AMT Exemption Permanent:
- The Alternative Minimum Tax exemption is now permanent, with higher thresholds.
- Estate Tax Exemption Expanded:
- Increases to $15 million per individual / $30 million per couple starting in 2026.
New: Wealth-Building for Children
- Trump Kids Account Pilot Program:
- Families earning below 200% of the Federal Poverty Level (~$60,000 for a family of four) will receive $1,000 invested at their child’s birth in a federally managed account.
- Funds grow tax-free and may be used for:
- Education
- Homeownership
- Retirement
- Early withdrawals are restricted; this is a meaningful step toward generational wealth for modest-income households.
Energy Policy Reversal
- Clean Energy Credits Eliminated:
- Federal incentives for EVs, solar panels, and home efficiency upgrades are rolled back.
- Traditional Energy Boosted:
- Oil, gas, and mining sectors regain tax incentives and faster permitting.
Healthcare & Savings
- HSA Limits Increased:
- Individual: $4,150 | Family: $8,300 | +$1,000 catch-up (age 55+)
- Telehealth remains eligible for HSA reimbursement.
- ACA Subsidies Restricted:
- Premium tax credits now limited to households under 400% of the Federal Poverty Level.
- Medicaid Access Tightened:
- New verification procedures could reduce eligibility for some enrollees.
Education & Loans
- Graduate Loan Cap:
- Federal borrowing limited to $28,500/year for graduate students.
- 529 Plan Expansion:
- Eligible for apprenticeships, certification programs, and up to $10,000 in student loan repayment.
- Public Service Loan Forgiveness (PSLF):
- Closed to new borrowers after enactment.
What It Means for Your Planning
- This bill avoids the “tax cliff” many feared and delivers long-term clarity on tax policy.
- More generous deductions and permanent lower rates offer real opportunities for tax-efficient wealth building.
- Green energy investors may want to act soon as credits phase out.
- Family-focused clients can now incorporate government-funded child savings into their legacy strategies.
- While these policies are promising, they come with broader economic implications — including over $3 trillion in added national debt over the next decade.
Contact North Texas Wealth Management Today
We are here to help you interpret what this means for your situation, whether that’s tax strategy, retirement goals, business planning, or generational wealth.
If you have any questions, our team is here to answer them. Please feel free to reach out to us with any concerns.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific situation with a qualified tax advisor. #781423
