The One Big Beautiful Bill Act was finally passed by Congress and signed into law on Independence Day. At over 900 pages, it is one of the largest pieces of legislation and is sweeping in its scope. Find out what all these changes mean to your financial planning with our summary review.

What the Big Beautiful Bill May Mean for You

July 10, 2025
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Tax Planning
General Financial Planning

By Net Worth Advisory Group 

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After much wrangling, the massive “big beautiful bill” legislation (OBBBA) was finally approved by narrow margins in both the Senate and the House and signed into law by the president on July 4th. At 940 pages long, the Act extends many of the provisions of the Tax Cut and Jobs Act of 2017 (TCJA) that were set to expire this year and increases funding for GOP priorities, such as border security, defense spending, and energy production. 


At the same time, significant cuts were made to Medicaid (and indirectly to Medicare), the Affordable Care Act, and social service programs that are expected to affect the health insurance of about 16 million people by 2034. Reports have quoted the Congressional Budget Office’s estimates of $3.3 trillion added to the nation’s debt over the next 10 years from this legislation.


The tax and spending provisions are extensive. Here is a breakdown of many of them and how they may affect your own finances.

Extension of the TCJA Tax Provisions and New Deductions

  • The OBBBA makes many of the TCJA permanent, including tax brackets (topping out at 37%) with certain inflation adjustments.
  • The Act extends the TCJA standard deduction along with an increase to $15,750 for single filers, $23,625 for head of household, and $31,500 for MFJ taxpayers, inflation-adjusted after 2025.
  • The controversial SALT deduction for state and local taxes is increased from $10,000 to $40,000 until 2030 for those with an adjusted gross income (AGI) under $500,000.
  • In addition, there is a new “senior deduction” of $6,000 for those 65 and over with an AGI of less than $75,000 single/$150,000 married. Phaseouts occur above these.
  • The Child Tax Credit is now permanent and was increased from $1,750 (2025) to $2,200 in 2026).
  • Higher-income taxpayers may enjoy the now-permanent higher alternative minimum tax (AMT) thresholds taking effect in 2026. 
  • The OBBBA simplifies the overall limitation on itemized deductions. It also eliminates miscellaneous itemized deductions for all but educator expenses and creates a percentage cap on deductions for higher-income individuals. 
  • In a nod to the president’s campaign promise to eliminate taxes on gratuities, the Act includes deductions for tips and overtime pay. For tax years 2025-2028, up to $25,000 in tips and $12,500 (single), $25,000 (married) in hourly overtime wages (not salaries) may be deducted with phase-out for higher income earners ($150,000 single, $300,000 joint).
  • New car loan interest may be deductible up to $10,000 from 2025-2028. Eligible vehicles must have final assembly in the USA, and this deduction phases out after $100,000 of income.
  • Federal financial aid and student loans underwent significant changes. Key among them: greater eligibility for low-income Pell Grants, but lower caps on undergraduate and graduate student loan limits as well as low caps on parental loans (PLUS) at just $20,000 per student per year and a $65,000 cap. 
  • The OBBBA made the expiring federal estate tax exemptions permanent and increased the limits to $15 million and $30 million for single/MFJ taxpayers, respectively, indexed for inflation. This would also apply to the generation-skipping transfer tax (GSTT).
  • The legislation expanded the Section 199A deduction for small businesses.

Greater Savings With the New Act

  • Section 529 educational savings accounts may now be used for more than just K-12 tuition, including books, tutoring, test preparation, and homeschool materials; and allowable distributions are expanded from $10,000 to $20,000 per year. Distributions from these accounts are also now tax-free for special education such as speech and occupational therapies and learning software expenses. 
  • Newborn savings accounts may now be established and seeded with $1,000 from the federal government from 2025-2028. Further contributions may be added up to $5,000 per year and may be used for educational, first home purchase, or business start-up expenses after age 18.

What Was Taken Away

Along with the projected $3.3 trillion of additional national debt, the major criticism of the Big Beautiful Bill was the reduction of federal Medicaid and the Supplemental Nutrition Assistance Program (SNAP). There were also reductions in federal spending on many other programs. 

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The new legislation:

What Does All This Mean for Your Financial Future?

The One Big Beautiful Bill Act is a historical, sweeping piece of legislation and will affect the financial future of everyone in a few (or even many) ways. Now that the legislation is law, it will take some time for analysts, accountants, attorneys, and others to digest and understand the implications and how to apply the new rules and laws to each person’s financial and tax situation. For most taxpayers and families, incorporating these changes will require the assistance of experienced financial professionals to realize the full benefits.

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We at Net Worth Advisory Group are here for you. Don’t hesitate to reach out to our team for guidance; we can help you align these new laws with your long-term goals and risk tolerance as you pursue your ideal future. 

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Call us at 801-566-6639, or schedule a complimentary, no-obligation consultation here. To learn more, visit our website.

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About Net Worth Advisory Group

Founded in 2003, Net Worth Advisory Group is an independent, fee-only, CERTIFIED FINANCIAL PLANNER® and investment advisory firm located in Salt Lake City, Utah. We specialize in helping people transition from the workplace into retirement and ensuring that those who are already retired will not outlive their nest egg. Our top priority is to have clients experience a greater sense of ease with diligent, personalized wealth care and the implementation of customized financial plans and ongoing personalized asset management. We equip all clients with a comprehensive financial plan, meeting every six months to update as needed and review investment performance. Our team is passionate about providing comprehensive financial planning with the fee-only model, and we love feeling like we’re making a difference in our clients’ financial lives.

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As a NAPFA-registered fee-only advisory firm, our recommendations are untainted by a hidden agenda to sell financial products paying large commissions. Unlike our competitors at brokerage firms, insurance companies, and banks, we are compensated solely by our clients, so we are financially motivated to provide objective advice that is always in our clients’ best interests. Anyone can call himself or herself a financial planner, but only an advisor with the CERTIFIED FINANCIAL PLANNER®, CFP® designation has met the education, examination, experience, and ethical requirements mandated by the CFP® board. According to the CFP Board, there are 97,000+ CFP® professionals in 2023, representing about 1 in 3 financial advisors in the U.S. Net Worth advisors are also members of NAPFA, which only has about 4,600 advisors, and are either CFP® professionals or CFP® professionals in training.

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Net Worth Advisory Group’s mission is to significantly improve the lives of our clients by delivering exemplary financial planning and wealth management advice that enables them to live the lives they have imagined.

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