President Trump just signed the One Big Beautiful Bill (OBBB) into law — a major tax and spending bill that affects everything from income taxes to student loans. Here's how it may impact you:
💰 Tax Cuts & Deductions
- Trump’s 2017 tax cuts were made permanent. That means lower tax rates and a bigger standard deduction — $31,500 for married couples, $15,750 for single filers in 2025. Because of the bill, it is estimated that 62% of taxpayers will avoid an increase in taxes.
- Child Tax Credit rises to $2,200 per child next year, and adjusts for inflation.
- Child Savings Account will be created and credited with a one-time deposit of $1,000 for children born between 2025 and 2028. Parents can also contribute up to $5,000 per year. Money grows tax-deferred and must be held until at least 18 years of age unless used for some qualifying items.
- New deductions for tips and overtime through 2028 (if you earn under $150K single / $300K married).
- Seniors (65+) get an extra $6,000 deduction from 2025–2028.
- SALT deduction cap rises to $40,000 temporarily for high-tax states like NY and CA, phasing out for people making more than $500,000. The biggest beneficiaries of this are the upper middle class.
🧾 What’s Being Cut or Changed
- EV & green energy tax credits end soon September 30th.
- Student loan programs like SAVE and Grad PLUS will be replaced with new repayment caps in 2026.
- Big college endowments face higher taxes starting in 2026.
🏥 Cuts to Medicaid & SNAP
- Medicaid work requirements start by Dec. 31, 2026; full funding cuts begin in 2028.
- SNAP (food stamps) adds stricter work rules, requiring 20 hours per week unless falling under an exemption. Age limit raised to 64(previously 55).
📊 The Big Picture
- The good: Potentially higher economic growth.
- The bad: Federal debt could rise nearly $3.8 trillion over the next decade according to many experts, however that includes the cost of extending the 2017 tax cuts. Without incorporating that figure it would still add to the deficit but reduce the amount by 2-3 trillion.
- Bottom line: Economic growth is expected to be higher, however the already out of control government deficit will get even bigger. What does it mean for you? You’ll likely keep more of your paycheck — but expect less from government programs. Although it may be good for economic growth, it could also lead to higher inflation, and long-term rates. The former is good for the stock market while the latter is a headwind.
If you have any questions on how the new bill could affect your personal situation, give us a call to schedule an appointment.
-HPK Provident Advisors.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth may not develop as predicted