The Big Beautiful Bill: Key Takeaways for Investors and Taxpayers

“Staying informed on tax policy is not just a necessity, but a strategic advantage that helps individuals and businesses navigate challenges and seize growth opportunities.”

The recently enacted Big Beautiful Bill brings a range of impactful tax and financial planning changes that are especially relevant to individual taxpayers, families, and small business owners. Staying informed on tax policy is not just a necessity, but a strategic advantage that helps individuals and businesses navigate challenges and seize growth

opportunities.

Among the most notable developments is the permanent extension of the individual income tax rates established under the Tax Cuts and Jobs Act (TCJA), removing previous uncertainty about a potential sunset in 2025.

The standard deduction for 2025 has been inflation-adjusted to $15,750 for single filers and $31,500 for married couples filing jointly, further simplifying filing for many households. In addition, there is a new temporary Senior Bonus Deduction that provides an additional $6,000 deduction for taxpayers 65 and older from 2025 to 2028. Phase out

starts at $75,000 MAGI for individuals and $150,000 for joint filers. This replaces the original proposal from earlier iterations of the bill that wanted to exclude Social Security income from taxation.

Another headline item is the significant expansion of the State and Local Tax (SALT) deduction cap to $40,000 through 2029, with a gradual phase-out for MAGI above $500,000 and a scheduled reduction back to $10,000 in 2030 for higher earners.

Other itemized deduction changes include maintaining mortgage interest deductibility on balances up to $750,000 and a lower limit on itemized deductions for high-income earners, who will now see a reduced marginal benefit ($0.35 instead of $0.37) for each dollar deducted.

Charitable contributions will also face a new 0.5% AGI floor, requiring higher-income taxpayers to contribute more before receiving a deduction.

The bill introduces the Trump Savings Account, a new tax-advantaged vehicle for children born between 2025 and 2028. These accounts feature a $1,000 federal seed contribution, annual after-tax contributions up to $5,000 by parents, tax-deferred growth, and favorable long-term capital gains treatment upon qualified withdrawal after age 18. Employer contributions up to $2,500 will be excluded from the recipient’s taxable income. Full implementation is pending further guidance.

Several other temporary benefits include a deduction of up to $25,000 in tip income (phased out at $150,000 MAGI for single filers and $300,000 MAGI for married filing jointly) and an auto loan interest deduction of up to $10,000, applicable only for vehicles with final assembly in the U.S. and subject to income phaseouts.

On the business side, the Qualified Small Business Stock (QSBS) rules have been revised, introducing a tiered exclusion schedule: 50% after 3 years, 75% after 4 years, and 100% after 5 years. The exclusion cap is increased from $10 million to $15 million, with the gross asset limit raised to $75 million.

Other key provisions include a permanent increase in the Child Tax Credit to $2,200 and a significantly expanded lifetime gift and estate tax exemption, now $15 million per individual and $30 million per couple, both indexed for inflation.

These wide-ranging changes present opportunities and challenges that warrant careful review. Investors and taxpayers are encouraged to revisit their planning strategies in light of the new law to ensure alignment with the updated rules and to maximize potential tax advantages.