A Supportive Guide to This Sweeping New Tax Law

If you’ve felt confused—or even overwhelmed—by the recent “One Big, Beautiful Bill” Act (OBBBA), you’re not alone. This legislation brings major permanent and temporary tax changes that reach far beyond politics. It has real, tangible implications for your financial life, no matter your income level, age, or profession. Think of this as your starting point for understanding what’s new and how it may affect you. The key is to stay informed and take proactive steps while there’s plenty of time to prepare.

Income Tax, Deductions, and Credits

Under the new law, the lower income tax brackets originally created by the TCJA are now permanent. You’ll also see updated income thresholds, so your tax rate may shift. The higher standard deduction is here to stay too—and it will continue adjusting each year for inflation, giving you a bit more breathing room.

Families may notice significant updates to the Child Tax Credit. The refundable and nonrefundable amounts have changed, and income-based phaseouts could impact how much you qualify for. If you finance a vehicle, you may benefit from the new $10,000 car loan interest deduction—just keep in mind that your car must be assembled in the U.S. to qualify.

For workers who rely on tips, there’s a temporary tax break on up to $25,000 in tip income. A list of eligible occupations will be released soon, so you may want to keep an eye out if tipping is a big part of your income. Those living in high-tax states may also appreciate the increased SALT deduction cap, now up to $40,000, though high earners will see phaseouts that could limit the benefit.

Wealth Transfer, Investment, and Retiree Provisions

If you’re retired or nearing retirement, you may qualify for the temporary $6,000 “Senior Bonus” deduction, depending on your income. Wealth transfer rules have also shifted: estate, gift, and generation-skipping transfer tax exemptions have permanently increased to $15 million, offering expanded planning opportunities.

Investors may benefit from inflation-adjusted capital gains brackets that help keep gains in lower tax ranges. And for those who previously struggled with the Alternative Minimum Tax, the relief is now permanent—although higher earners may still see quicker phaseouts based on income.

Other Noteworthy Changes

One of the most impactful updates comes from the healthcare side: Medicaid will undergo major shifts, including $1 trillion in funding cuts, tightened eligibility rules, and added work or volunteer requirements. These changes could affect households that rely on coverage or support family members who do.

Parents should take note of a new opportunity: “Trump Accounts,” tax-advantaged investment accounts for eligible children. These accounts allow for growth within defined contribution limits and structured investment options.

If you’ve considered purchasing clean energy equipment or an electric vehicle, you may want to act quickly. Clean energy and EV tax credits are set to phase out soon, reducing future incentives.

What This Means for You

The OBBBA affects a wide range of taxpayers—whether you’re a low-income household, a growing family, a small-business owner, a high-income investor, or a retiree. Don’t wait until tax season to think through these changes. Many of the provisions are permanent, others are temporary, and all of them may influence your long-term financial planning.

Now is the time to review your situation, understand what’s changing, and evaluate whether you need to adjust your strategy. Talking with a financial advisor or tax professional can help you make informed decisions tailored to your goals.