You've probably heard the news: President Trump signed the One Big Beautiful Bill Act into law on July 4th, making it one of the most significant pieces of tax legislation we've seen in years. If you're wondering how it might affect your finances, you're not alone. This is easily the most frequently asked topic by my clients lately.
At its core, this new law makes many of the 2017 Tax Cuts and Jobs Act provisions permanent, meaning that lower income tax rates and higher standard deductions will remain in effect for most Americans. But there's much more to unpack.
The legislation also brings changes to:
- Capital gains tax thresholds for higher-income earners
- Retirement savings opportunities (including some new account types)
- Estate and gift tax exemptions
- State and local tax deduction limits (the SALT cap increases significantly)
- Charitable giving strategies
- Small business deductions and depreciation rules
While many of these changes provide welcome certainty after years of wondering "what happens when the tax cuts expire," they also create new planning opportunities—and a few potential pitfalls to navigate.
Here are the seven questions I'm hearing most often from clients, along with what you should know:
1. "Will my taxes be going up or down?"
For most people, the answer is down or at least staying the same. The bill locks in the lower tax brackets and higher standard deduction we've had since 2018. However, if you're a high earner or planning to sell investments or property, the picture gets more nuanced. Some deductions phase out at higher income levels, and capital gains thresholds have been adjusted.
What you can do now: Take a look at any major financial moves you've been considering for this year or next. A quick tax projection could help you time things more strategically.
2. "What's different about retirement accounts?"
This is where things get interesting. The law introduces some new account types and expands access to existing ones, but it also tightens specific rules around high-income contributions. The details matter here, especially if you've been doing backdoor Roth conversions or maxing out multiple account types.
What you can do now: If retirement planning is a priority for you, it's worth reviewing your current strategy. Some approaches that made sense before may be even better now, others might need adjustment.
3. "I heard the estate tax exemption changed again?"
Yes, and it's good news if you're concerned about estate taxes. The exemption has been increased and made permanent, giving families more flexibility for wealth transfer strategies. However, if you've been putting off estate planning because of all the uncertainty around these rules, now might be the time to move forward.
What you can do now: Even if you don't think your estate will owe taxes, this could be a good time to review your will, beneficiary designations, and any existing trusts.
4. "Does this change how I should approach charitable giving?"
There are definitely some new opportunities here, particularly if you're already doing qualified charitable distributions from your IRA or using donor-advised funds. The law also modifies some reporting requirements, which may impact your record-keeping.
What you can do now: If giving is part of your financial plan, ask about strategies that might be more tax-efficient under the new rules.
5. "I own a small business, what should I be paying attention to?"
Business owners have several new provisions to consider, from updated depreciation schedules to new energy-efficiency credits. The changes vary significantly depending on your business structure and industry, so this is a case where the details truly matter.
What you can do now: If you're planning any significant equipment purchases, facility improvements, or considering changing your business structure, review these provisions with your CPA or tax advisor sooner rather than later.
6. "Are there any gotchas I should watch out for?"
The biggest one I'm seeing involves families with trusts or other complex structures. The law includes new reporting requirements designed to increase transparency, which may result in additional paperwork and compliance costs for some families.
What you can do now: If you have existing trusts, family partnerships, or other estate planning structures, a quick review with your advisor can help identify any new requirements you'll need to plan for.
7. "Honestly, what should I actually be doing right now?"
Here's the thing: while this law brings about many changes, it also brings something we haven't had in a while - certainty. Many of the provisions are now permanent, which means we can make plans without wondering if they'll change in a year or two.
What you can do now: Don't feel like you need to overhaul everything immediately. Start with a review of your current financial plan, tax strategy, and estate documents. From there, you can identify which changes create new opportunities for your specific situation.
The bottom line? This legislation affects everyone differently. What matters most is understanding how it impacts your particular situation and making sure you're positioned to take advantage of the opportunities it creates.
Have questions about how the new law affects your financial plan? I'd be happy to walk you through it. Whether you're curious about retirement strategies, tax planning, or estate planning opportunities, let's schedule a time to chat about what makes sense for your situation.