The new tax law—officially named the One Big Beautiful Bill Act—brings significant changes for families, savers, and retirees. While headlines focus on politics, the real question is: What does this mean for your financial plan? Here are eight important ways this new legislation may benefit you and your family.
- Lower Tax Rates Are Here to Stay
The tax brackets introduced back in 2017 are now “permanent,” including the top rate of 37%. The standard deduction also increases to $31,500 for joint filers and $15,750 for single filers.
Why it matters:
This stability creates long-term planning opportunities. Lower rates mean now is an excellent time to consider Roth conversions, time your income strategically, or harvest gains in lower brackets.
- Bigger Child Tax Credit
The Child Tax Credit rises to $2,200 per child and will adjust with inflation going forward. Part of the credit is refundable, benefiting lower-income families. Income phaseouts still apply, beginning at $200,000 for single filers and $400,000 for married couples filing jointly.
Why it matters:
If you have children at home, this change can help your annual budget. It’s also a good time to review your tax withholding and overall savings strategy.
- New Trump Custodial Accounts for Kids
Starting in 2026, a new program allows every newborn (born between Jan. 1, 2025 and Dec. 31, 2028) to receive a $1,000 government contribution into a custodial account. Parents can add up to $5,000 in after-tax funds annually. Funds grow tax-deferred and can eventually be used for education or retirement.
Why it matters:
This is essentially a head start on your child’s long-term savings. Combining the free government contribution with existing education accounts creates an opportunity to stack tax benefits early in life.
- Expanded 529 Education Flexibility
529 plans just became more versatile. They can now cover K–12 tuition and credentialing tests, and annual withdrawal limits for these purposes are increasing. Annual contribution limits remain governed by gift tax exclusion rules (currently $19,000 per beneficiary). Rollovers to ABLE accounts for individuals with disabilities are now “permanent.”
Why it matters:
If you have school-age children, this means more options for education funding—without sacrificing the tax advantages of a 529 plan. Families supporting a child with special needs gain even more flexibility.
- HSA Enhancements You Can Leverage
Health Savings Accounts (HSAs) remain one of the most tax-efficient tools available. Contribution limits are increasing in 2025 to $4,300 for individual coverage and $8,550 for family coverage, with an additional $1,000 catch-up contribution allowed for those age 55 and older. New rules also expand what counts as a qualified expense, including Direct Primary Care services. Starting in 2026, some ACA Bronze and catastrophic plans will qualify as HSA-eligible, broadening access for more individuals.
Why it matters:
If you’re in a high-deductible health plan, maxing out your HSA is one of the smartest tax moves you can make. HSAs are triple tax-advantaged—tax-deductible contributions, tax-free growth, and tax-free withdrawals for medical expenses.
- Estate and Gift Tax Opportunities
Starting in 2026, the federal estate and gift tax exemption is now “permanently” set at $15 million per person ($30 million per couple), indexed for inflation thereafter.
Why it matters:
For high-net-worth families, this creates an expanded window to transfer wealth estate-tax-free to future generations through bequests, lifetime gifting strategies, trusts, and charitable giving vehicles.
- Charitable Giving Gets Easier
Even if you don’t itemize deductions, you can now claim an above-the-line charitable deduction—up to $1,000 for individuals or $2,000 for married couples.
Why it matters:
This is great news for anyone who wants to give back and still receive a tax benefit while claiming the standard deduction.
- Higher SALT Deduction Cap for All Filers
The state and local tax (SALT) deduction cap has been significantly increased under the new law. Single filers and married couples filing jointly can now deduct up to $40,000, up from the previous $10,000 limit. Taxpayers married filing separately see their cap rise from $5,000 to $20,000. However, the deduction begins to phase out for high-income taxpayers. This expanded cap only applies from tax years 2025 through 2029 and is scheduled to revert to the original lower limits in 2030.
Why it matters:
For households in high-property-tax or high-income-tax states, this expanded cap can provide meaningful federal tax relief. That said, higher-income earners may see reduced benefits due to phaseout thresholds, and the temporary nature of the provision makes long-term planning essential.
What Should You Do Next?
These updates create both opportunities and timelines. Some provisions are “permanent,” while others—like the new custodial account newborn contributions and SALT deduction cap increases—apply only for a limited window. Now is the perfect time to:
- Review your income and Roth strategies while tax rates are low.
- Update your education and healthcare savings plans.
- Revisit your estate and charitable giving goals.
Want to see how this impacts your plan? Clients: Call or email us! If you’re new here, please use the button below to schedule a 15-minute introductory call. Together, we’ll make sure you’re taking advantage of every opportunity this new law provides.
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