10 Smart Planning Insights from the New “Big, Beautiful” Tax Bill

Navigating the latest tax legislation is a lot like sailing—you need the right tools, the right timing, and a clear course to reach your ideal destination. The recently passed “Big, Beautiful” tax bill introduces sweeping changes that impact families, retirees, and professionals across the U.S.

Below, we break down 10 key tax updates—and how to plan smartly around them.

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1. $1,000 Automatically for Every Child Born Between 2025–2028

Starting in 2025, the government will automatically deposit $1,000 into an account for every child born through 2028. No forms. No applications. It’s a tax-free jumpstart to their future.

How to use it: This money can be used at age 18 for education, a first home, or launching a business. It's a powerful way to begin building generational wealth—automatically.

2. Add Up to $5,000 Per Year to That Child’s Account

Family members and even employers can contribute $5,000 annually to this new account, with tax-free growth and tax-free withdrawals for major milestones.

Planning Tip: Treat this like a Roth IRA for your child. The earlier you start, the more powerful the compounding.

3. Child Tax Credit Rises to $2,500

The Child Tax Credit will increase from $2,000 to $2,500 per child over the next four years. To qualify, you’ll need to file jointly and ensure each child has a valid Social Security number.

Small bump, big impact. This can add up quickly for growing families.

4. Tips and Overtime Pay Are Now Tax-Free

If you earn tips or work overtime, that income is now exempt from federal income tax.

Smart move: Redirect this extra take-home pay toward emergency savings or knocking down high-interest debt.

5. Car Loan Interest Is Now Tax-Deductible

For the first time, interest paid on vehicle loans is deductible on your federal return.

It’s not a game-changer alone, but combined with other deductions, it’s another way to keep more money in your pocket.

6. SALT Deduction Cap Raised to $40,000

For households making under $500,000, the State and Local Tax (SALT) deduction cap jumps from $10,000 to $40,000.

High earners in high-tax states, take note: This is a significant planning opportunity, especially for business owners and high-income professionals.

7. Retirees Get an Extra $4,000 Deduction

If you’re 65+ and earn less than $75,000 annually, your standard deduction just increased by $4,000.

How to leverage this: Use the extra cushion to reduce taxable retirement income and extend your portfolio’s longevity.

8. Tighter Rules on Medicaid and Food Assistance

Expect more state-level control and stricter eligibility requirements for government aid programs.

Planning consideration: If you or a loved one rely on assistance programs, now is the time to re-evaluate your financial safety net.

9. Major Changes in Student Loan Support

Income-driven repayment plans are being phased out. In their place: expanded Pell Grants and new funding for trade and workforce education.

The takeaway: Families may want to reconsider traditional college routes and explore high-value skill-building programs.

10. $220 Billion Toward Border and Defense Spending

With $150B directed to military tech and $70B to border security, this bill signals a strong shift in federal priorities.

Why it matters: Understanding national spending trends can help long-term investors gauge market shifts and economic focus areas.

Final Thought: Use These Tools Intentionally

Each of these tax changes is a tool—just like a retirement income plan, a tax-efficient withdrawal strategy, or a family trust. But tools only work if you use them.

Let’s align your plan with the new landscape—so you can live the life you’ve envisioned, retire as you desire, and leave a legacy that lasts.

Want to know which changes could impact your financial strategy the most?
📅 Book a strategy session with Bill Bloom today.

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