The One Big, Beautiful Bill Act (OBBBA) brings a wide range of permanent and temporary tax changes that could meaningfully impact your financial life. While the law has generated plenty of headlines, it’s more than a political talking point—it reshapes tax planning for people across income levels, ages, and occupations. If you’re feeling unsure about how it all applies to you, you’re not alone. Now is a great time to learn what the updates mean so you can make informed decisions moving forward.
Income Tax, Deductions, and Credits
Lower income tax brackets originally created under the Tax Cuts and Jobs Act (TCJA) are now permanent, which may help reduce your overall tax bill. The standard deduction also remains higher and continues to adjust annually for inflation.
You may benefit from updates to the Child Tax Credit, which now includes revised refundable and nonrefundable amounts as well as new income-based phaseouts. If you’re financing a vehicle, the new $10,000 car loan interest deduction may apply—especially if the car was assembled in the United States.
Service workers may see meaningful relief thanks to a temporary tax break on up to $25,000 of tip income. A full list of eligible occupations will be released soon. Additionally, if you live in a high-tax state, the increased SALT deduction cap—now up to $40,000—could provide added relief, though higher earners will see phaseouts.
Wealth Transfer, Investment, and Retiree Provisions
If you’re age 65 or older, you may qualify for the temporary $6,000 “Senior Bonus” deduction based on your income. Those engaged in estate planning may benefit from the permanent increase in estate, gift, and generation-skipping transfer tax exemptions, now set at $15 million.
Investors may appreciate adjustments to capital gains brackets, which now account for inflation and can help keep you within lower tax ranges. And if you’ve previously worried about the Alternative Minimum Tax, the permanent relief may provide reassurance—though higher earners may still reach phaseout levels more quickly.
Other Noteworthy Changes
OBBBA introduces major Medicaid changes, including $1 trillion in funding cuts, new work or volunteer requirements, and stricter eligibility rules. If these changes affect you or a family member, it may be important to review coverage options sooner rather than later.
For families with younger children, the law also creates new “Trump Accounts.” These offer tax-advantaged growth, annual contribution limits, and guided investment structures aimed at helping families build long-term savings.
If you’re considering clean energy upgrades or purchasing an electric vehicle, be aware that related tax credits will begin phasing out soon. Acting quickly could help you take advantage of current incentives.
What This Means for You
The OBBBA affects a broad range of taxpayers—from low-income families to retirees and high-net-worth households. Its combination of permanent and temporary provisions means your planning approach may need to shift.
Rather than waiting until tax season, consider reviewing your financial strategy now. Understanding how these changes apply to you can help you make confident, proactive decisions. When in doubt, consult a financial advisor or tax professional who can offer personalized guidance for your situation.
