After weeks of negotiation, the "One Big Beautiful Bill Act" has officially become law. This sweeping legislation brings significant changes to tax policy, education savings, small business incentives, and estate planning, representing the most substantial tax reform in years.
Here's what our RetireRight team believes you should know about how this affects your financial future.
Key Financial Changes You Need to Know
1. Trump Tax Cuts Are Now Permanent
The bill permanently extends the 2017 Tax Cuts and Jobs Act (TCJA), meaning that lower income tax brackets and higher standard deductions will remain in effect indefinitely. This provides much-needed predictability for long-term financial planning.
What this means for you: If you're planning retirement distributions, charitable giving strategies, or Roth conversions, you can now count on these lower tax rates continuing.
2. New Senior Bonus Deduction
From 2025 through 2028, individuals aged 65 and older may qualify for an additional deduction of up to $6,000/person (or $12,000 per couple).1 This temporary benefit (valid 2026-2028) can lower your taxable income and provide more flexibility in retirement planning.
3. Higher Estate Tax Exemptions
Starting in 2026, the lifetime estate and gift tax exemption increases to $15 million per person ($30 million for married couples).1 This expanded exemption creates new opportunities for high-net-worth families and business owners to transfer wealth more tax-efficiently.
4. Enhanced 529 Plans and New Trump Accounts
The bill expands 529 education savings plan flexibility, increasing annual withdrawal limits for K-12 expenses and allowing use for workforce training programs.
Additionally, new "Trump Accounts" will launch in 2026. These tax-advantaged accounts allow parents to contribute up to $5,000 annually per child under age 8. The government will provide a $1,000 bonus for children born between 2025 and 2028 (parents must have Social Security numbers to qualify).
Uses: Funds can be used for education, purchasing a first home, or starting a small business.
5. Expanded Child Tax Credit
The Child Tax Credit increases to $2,200 per child, with the refundable portion now indexed to inflation. This permanent change provides meaningful support for working families managing household budgets.
6. Small Business Tax Benefits
The bill permanently extends the 20% Qualified Business Income (QBI) deduction for pass-through entities while expanding income thresholds — a significant advantage for LLCs, S-corporations, and sole proprietors.
The Qualified Small Business Stock (QSBS) exemption is also expanded, allowing business owners and investors to exclude more capital gains from federal taxes when holding eligible shares for at least five years.
7. Universal Charitable Deduction
Beginning in 2025, all taxpayers can claim a charitable deduction of up to $1,000 (for individuals) or $2,000 (for married couples filing jointly), even if they do not itemize deductions. This makes charitable giving more attractive for millions of Americans.
8. Impact on Federal Deficit
The bill is projected to add trillions to the national deficit over the next decade.2 While long-term consequences remain uncertain, this could lead to future tax increases or benefit adjustments.
Our recommendation: Build flexibility into your financial plan by diversifying income sources, reassessing risk exposure, and exploring adaptable tax strategies.
What This Means for Your Planning
This legislation creates both opportunities and considerations for your financial strategy. Whether you're focused on retirement planning, education savings, business growth, or estate planning, now is an ideal time to review and adjust your approach.
The new tax landscape presents opportunities to optimize your strategy, but it also requires careful consideration of potential future changes, given the impact on the deficit.
Next Steps
At RetireRight, we're here to help you navigate these changes and ensure your financial plan aligns with the new policy environment. If you have questions about how the "One Big Beautiful Bill" affects your specific situation, we encourage you to reach out for a free initial consultation.
Sources:
- Kate Dore, Lorie Konish, Greg Iacurci, Jessica Dickler, Annie Nova. CNBC. "What Trump's 'One Big Beautiful' tax-and-spending package means for your money." July 4, 2025.
- Garrett Watson et al. Tax Foundation. "'One Big Beautiful Bill Act' Tax Policies: Details and Analysis." July 3, 2025.