"Big Beautiful Bill" Proposed Tax Changes

In this video, Andy uncovers 9 separate proposed tax changes in the "Big Beautiful Bill" that the House recently approved and sent to the Senate.

Some of the items include...

1. Extension of the Tax Cuts and Jobs Act 
2. Changes to the Standard Deduction
3. Adjustments to the Child Tax Credit
4. The SALT Cap Increase
5. Itemized Deduction Limitations
6. "No Tax on Tips and Overtime"
7. Auto Loan Interest Deduction
8. Estate Tax Exemption Increase
9. HSA Reforms

As always, if you have any questions, please don't hesitate to reach out.

Video Transcript...

The "Big Beautiful Bill" that they just pushed through the House and now is in the hands of the Senate. This can still change, but there are some personal income tax changes that are in this bill and they may impact you. I'm going to list 9 of them and we'll look at each of them. The first one is regarding the Tax Cuts and Jobs Act reform of 2017 during Trump's first term. There was a tax cut back then. That was supposed to expire at the end of 2025. Now, they're extending it. So, the same tax brackets that we've had for a while, those will still exist. There was some talk of a 39.6% for earners of over $1,000,000. That did not make the final bill that went through the house. Item number 2 – The Standard deduction – for a single filer, that's $15,000 of a standard deduction you get. If you are married filing joint, it's $30,000. That has been increased to $16,000 for single and $32,000 for married filing joint. Also, if you're 65 and older, there already was an additional either $2,000 deduction that you get for filing single or up to $3,200 filing joint. That's been increased by $4,000 per person. So, an extra $4,000 for a single filer, an extra $8,000 for married filing joint. This is subject to some income phase outs. All of the standard deduction items are supposed to go away at the end of 2028. Item number 3 – Child tax credit. This was a $2,000 credit, some of which would be refundable, some of which is not refundable. That was supposed to go back down to $1,000 when the Tax Cuts and Jobs Act rules expired. But now it's going up to $2,500, which is set to go back to $2,000 after 2028. Item number 4 is and increase in the cap for the SALT deduction (State and local taxes). It used to be $10,000. Now, that's supposed to go up to $30,000. In that case, you'd want to be tracking those a little more closely. That also has an AGI phase-out range for certain income levels. Item number 5 is an deduction limitation for the 37% tax bracket. So, if you're in the 37% income tax bracket, this would make it so that your itemized deductions aren't reducing the amount that you owe 37% on. You're only saving roughly 35% on those. Item number 6 - "No Tax on Tips and Overtime". This still shows up as income. It is a below-the-line deduction that you get for any tips or overtime pay you receive. So, it can still factor into your AGI and other things but, you do get the deduction for your tips and overtime. Item number 7 is the ability to deduct auto loan interest on auto loans taken out since the beginning of 2025. This goes up to $10,000 of interest that can be deductible. There is an income phase-out. So, if you're single making over $100,000 or married filing joint with over $200,000 of modified adjusted gross income, you will get phased out of that deduction over the next $50,000 of modified adjusted gross income. Item number 8 is the estate tax exemption. When you pass away, at the federal level, in 2025, you get about $14,000,000 that you can pass on to future generations or your heirs without paying federal estate tax. That's per spouse. That estate tax exemption is now $15,000,000 going forward. It was set to go back to a much lower number, closer to $7,000,000. So, this is an increase as opposed to what would've happened had they not passed a new bill. So, estate tax exemption would increase to $15,000,000 per spouse. Item number 9, doubling the HSA contribution limits. It used to be $4,300 for an individual, or $8,550 for a family. Now with that being doubled, the numbers are twice that of $8,600 and $17,100. You get the first half no matter what. The second half, however, is subject to a modified adjusted gross income phase-out. So that's the 9 items. There's a whole bunch more in here as it's written. It's still in the hands of the Senate, and a lot of this can change. But, qualified opportunity zones are being extended. Qualified business income deduction, the QBI deduction, some changes to that which might allow you to have a somewhat larger deduction if you're in some phase out range. I might make a separate video on that. And then you've probably heard of some of these other things that are eliminated, which are, clean energy vehicle credits or putting solar panels on your roof and getting a deduction for that. So if you're looking to purchase an electric vehicle or solar panels, keep an eye on this bill.