Signed July 4, 2025
It’s been four months since the One Big Beautiful Bill Act was signed into law, and many clients are asking the same question: “What does this mean for me?”
While the name may sound lighthearted, the implications are very real. The law extends and modifies major parts of the 2017 Tax Cuts & Jobs Act, creating opportunities to reduce taxes, protect wealth, and support your long-term financial goals. At Bloom Advisors, we’re already incorporating these changes into our planning so you can stay ahead — not react later.
These changes touch nearly all areas of financial planning — including income taxes, retirement withdrawals, charitable giving, business ownership, estate strategies, and education savings. Below is a concise guide to the most relevant updates and how they might benefit you.
Key Provisions for Most Taxpayers
| Topic | What’s Changing | Timing | What This Means for You |
|---|---|---|---|
| Federal income tax rates | TCJA rates permanently extended (with inflation adjustments) | 2026+ | Continued low tax-rate environment supports Roth conversions and tax-efficient withdrawal planning |
| Standard deduction | Permanently increased to: $15,750 single / $31,500 joint / $23,625 HOH | 2025+ | Fewer taxpayers will itemize — review deduction strategy |
| Itemized deduction cap | Value of itemized deductions capped at 35% for highest earners | 2025+ | High-bracket taxpayers may lose some benefit |
| SALT (state/local tax) deduction | Cap increased to $40,000 through 2029; phases out at MAGI $500k; returns to $10k afterward | 2025–2029 | Meaningful benefit for high-income households in high-tax states |
| AMT (Alternative Minimum Tax) | Increased exemption amounts permanently extended | Ongoing | Reduced exposure for many families |
| Child Tax Credit | Increased to $2,200 per child, indexed for inflation | 2025+ | Greater family tax relief |
| Cash charitable deduction for non-itemizers | Up to $1,000 single / $2,000 joint | 2026+ | Charitable giving benefits now extend to most taxpayers |
For Seniors (Age 65+)
| Benefit | Rule | Phaseout | Timing |
|---|---|---|---|
| Enhanced senior standard deduction | Additional $6,000 per qualifying taxpayer | MAGI > $75k single / $150k joint | 2025–2028 |
Planning Opportunities
• Manage taxable income to reduce Social Security taxation
• Use Roth conversions while deduction remains available
For Business Owners
| Provision | Change | Benefit |
|---|---|---|
| Section 199A Deduction | 20% QBI deduction made permanent | Enhanced tax savings for pass-through business owners |
Advisor Guidance
• Review business structure and income flow to maximize QBI deductions
For High-Net-Worth & Estate Planning
| Topic | New Rule | Planning Implications |
|---|---|---|
| Estate & gift tax exemption | Permanently $15M single / $30M joint (indexed) | More room for tax-free wealth transfer — review gifting strategies |
| Charitable giving floor | First 0.5% of income no longer deductible starting 2026 | Consider accelerating gifts into 2025; donor-advised funds effective |
Family & Education Focus
| Provision | Summary | Effective |
|---|---|---|
| “Trump Accounts” (new) | Tax-advantaged savings for children under 18 • Govt contributes $1,000 for eligible newborns 2025–2028 • Converts to traditional IRA at age 18 | 2026 |
| 529 plan expansion | K–12 eligible expenses doubled to $20k/year + career/certification expenses | 2026 |
| ABLE enhancements | Higher contribution limits + stronger saver’s credit + 529-to-ABLE rollovers permanent | 2027 |
Worker-Focused Income Relief (Temporary)
| Topic | Rule | Caps | Timing |
|---|---|---|---|
| Tip income deduction | Deduct qualified tips | Up to $25k | 2025–2028 |
| Overtime deduction | Deduct qualified overtime pay | $12,500 single / $25,000 joint | 2025–2028 |
How Bloom Advisors Supports You
This law reinforces the value of proactive, ongoing planning. We will help you:
✔ Leverage lower tax brackets
✔ Reduce future RMD + Medicare surcharge exposure
✔ Maximize wealth transfer to loved ones
✔ Enhance education savings and family planning
✔ Optimize charitable giving timing and structure
✔ Review tax-efficient business ownership strategies
Our team is already working these provisions into your personalized financial plan.
Coordination With Your Tax Professional
These provisions may affect individuals differently based on their specific tax circumstances. Clients should consult with their tax preparer, CPA, or qualified tax professional for personalized guidance. Bloom Advisors can collaborate directly with tax professionals to help ensure compliance and optimize planning opportunities.
Let’s Talk About Your Opportunities
Your Bloom advisor is here to help you make the most of these new planning benefits.
Together, we’ll ensure no-regrets planning — today and for the future.
