What You Need to Know About the “One Big Beautiful Bill Act”
July 15, 2025
On July 4th, President Trump signed into law the One Big Beautiful Bill Act—a sweeping piece of legislation that brings major changes to a wide range of federal policies, including taxes, Social Security, Medicaid, immigration, and even the national debt ceiling.
This landmark law has sparked intense debate in Washington, with lawmakers on both sides offering differing takes on what it could mean for the economy and the long-term financial health of the country. But while the political debate continues to play out, many individuals are left wondering what, if anything, the bill means for their own financial picture.
Rather than diving into the more political or controversial aspects of the law, we’re focusing squarely on the provisions that may impact your finances — both now and in the years to come. Whether it’s changes to tax deductions and credits, new savings opportunities for children, or the potential for lower taxes on Social Security benefits, the bill contains several updates that are worth understanding.
Some of these changes may not apply to you directly, but they could be highly relevant to a family member or loved one.
Of course, laws like this are often complicated, and while many of the changes are straightforward, others may require a closer look at your specific financial situation.
Let’s break down some of the most important updates and how they could affect your financial picture moving forward.
Important Provisions of the One Big Beautiful Bill Act
Changes to Tax Deductions and Exemptions1
During President Trump’s first term, Congress passed the Tax Cuts and Jobs Act, which made major changes to the tax code. Many of those changes were set to expire at the end of this year, but the bill has made them permanent. That means all current tax rates and brackets will continue for the foreseeable future.
In addition, several tax deductions are set to increase under the bill. For example, the standard deduction has been raised from $15,000 to $15,750 for single individuals, and from $30,000 to $31,500 for married couples filing jointly. Future increases will be indexed to inflation.
For those who choose to itemize their tax deductions, the bill also increases the state and local tax (SALT) deduction limit from $10,000 to $40,000. This deduction will increase by 1% each year until 2030, when the cap reverts back to $10,000. Note that the SALT deduction begins to phase out for taxpayers earning $500,000 or more in annual income.
Finally, the exemption on estate and gift taxes is also being raised to $15 million (up from $13.99 million) for singles and $30 million (up from $27.98 million) for married couples.
Changes to Tax Credits1
The bill also makes some important changes to several types of tax credits — raising one while eliminating others.
First up is the child tax credit. The current level of $2,000 was set to expire by year’s end but has now been permanently increased to $2,200. (The original House version of the bill would have raised the credit to $2,500, so if you see that number anywhere, know that it’s out of date.)
On the other hand, the bill nixes many of the “green” tax credits that consumers have grown used to in recent years. That includes credits for buying new and used electric vehicles or installing energy efficient heating and cooling systems, including rooftop solar panels. The EV credits end on September 30, 2025, while the latter ends after December 31. So, if you were considering “going green” in any way this year, it might be best to do it sooner rather than later!
Changes That Could (Potentially) Affect Social Security Taxes1
The following information could technically have been covered in the “Changes to Tax Deductions” section, but as it’s possibly the trickiest provision.
According to multiple media reports, shortly after President Trump signed the bill into law, many of those who receive Social Security benefits received an email from the Social Security Administration.2 The email stated that the bill would “eliminate federal income taxes on Social Security benefits for most beneficiaries.”2 You may have also seen this claim floating around on social media.
As Social Security is such a key part of retirement planning, it’s important to clarify that this is not entirely accurate. The bill makes no direct changes to taxes on Social Security benefits.
Instead, the law creates a new type of temporary tax deduction specifically for seniors. Individuals aged 65 and older can now claim a $6,000 deduction if their annual income is $75,000 or less. Married couples filing jointly may claim up to $12,000 so long as their combined income is $150,000 or less. This deduction phases out above these limits, ending at $175,000 for individuals and $250,000 for couples.
What does this all have to do with Social Security? Well, when coupled with other types of deductions, this provision can reduce taxable income for many retirees and pre-retirees. Given that Social Security taxes are dependent on a person’s annual income, some retirees who take this deduction may find that, as a result, they no longer owe taxes on their benefits.
If you are collecting Social Security, plan to start in the near future, or know somebody who is, keep in mind that it takes some careful number crunching to determine whether this new deduction will impact taxes on your benefits.
Finally, bear in mind this new deduction isn’t permanent — it’s slated to expire after 2028.
Child Savings Accounts1
For those planning to welcome a child or grandchild into the family over the next few years, the bill contains a nifty provision: A new type of tax-advantaged savings account specifically for children born in 2025 through 2028.
When opening the account, the government will make a one-time deposit of $1,000. Parents and relatives can each contribute up to $5,000 a year, and employers can also kick in $2,500. Any earnings are tax-deferred until the child reaches 18; however, withdrawals will be taxed as long-term capital gains.
These types of accounts can be a handy way to help children save for the future, including higher education. However, there are lots of rules regarding these accounts, and they may not always be the best option compared to other alternatives.
Conclusion
As you can see, the bill comes with many changes that could influence your tax strategy, retirement planning, and long-term savings goals. While some provisions may offer fresh opportunities, others could require a strategic pivot. As always, the key is understanding how these updates apply to your specific circumstances.
Sources
1 Text of “ONE BIG BEAUTIFUL BILL ACT,” Congress.gov, https://www.congress.gov/bill/119th-congress/house-bill/1/text
2 “Social Security Email About ‘Big Beautiful Bill’ Tax Changes Sparks Confusion,” Kiplinger, July 7, 2025. https://www.kiplinger.com/taxes/social-security-email-on-big-beautiful-bill-tax-changes-sparks-confusion
Disclosure:
Advisory Services offered through Olde Raleigh Financial Group, a Member of Advisory Services Network, LLC. This material is provided as a courtesy and for educational purposes only. All information contained herein is derived from sources deemed to be reliable but cannot be guaranteed.
Advisory Services Network, LLC does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. You should always consult your own financial, legal or tax professional for information concerning your individual situation.