President Trump’s recently signed “One Big Beautiful Bill” is a sweeping piece of tax legislation that could affect many aspects of your financial life, from your paycheck to your Social Security benefits and small business deductions.
Spanning nearly 1,000 pages, the bill locks in and expands many provisions from the 2017 Tax Cuts and Jobs Act while cutting federal spending on certain social programs. Below, we break down key changes that may matter for your family, your business, and your retirement planning.
1. Tax Cuts Made Permanent
The bill makes the 2017 tax cuts permanent, avoiding scheduled increases after 2025. Marginal tax rates will remain lower, and the standard deduction will rise to:
$15,750 for single filers
$31,500 for married couples filing jointly
The child tax credit will increase to $2,200 per child starting in 2025, with up to $1,700 refundable.
What this may mean for you: Many households will maintain lower federal income tax rates while benefiting from a larger standard deduction, potentially reducing tax liability in coming years.
2. New Deductions for Workers
The bill introduces:
A deduction for tip income (up to $25,000) from 2025-2028 for workers in tip-heavy industries.
A deduction for overtime pay (up to $12,500 for single filers, $25,000 for joint filers), also phasing out after 2028.
An auto loan interest deduction (up to $10,000 for new U.S.-made vehicle loans between 2025-2028).
What this may mean for you: These deductions may reduce taxable income for service workers, those working long hours, or those planning to purchase a vehicle, but only during the specified windows.
3. Social Security Deduction for Seniors
Instead of eliminating federal taxes on Social Security income, the bill offers a $6,000 annual deduction for Social Security benefits. This phases out for higher-income seniors but may eliminate federal taxes on Social Security for many lower- and middle-income retirees.
What this may mean for you: Seniors receiving Social Security may see additional tax relief, improving after-tax retirement income.
4. Changes for Families with Children
Beyond the increased child tax credit, the bill creates “Trump Accounts”:
A one-time $1,000 federal deposit for each eligible U.S. citizen child born between 2025-2028.
Parents can contribute up to $5,000/year with tax-deferred growth.
Employers can contribute up to $2,500/year, not counted as taxable income.
What this may mean for you: Young families may use these accounts as a future-oriented savings tool for their children, functioning similarly to long-term investment accounts.
5. Impact on Small Business Owners and Gig Workers
The bill makes the Section 199A pass-through business deduction permanent, allowing eligible small business owners, contractors, and gig workers to deduct up to 20% of qualified business income indefinitely.
What this may mean for you: Rural small business owners and gig workers can continue using this deduction to lower taxable income, supporting cash flow for reinvestment and growth.
6. SALT Deduction Cap Raised
For those living in high-tax states, the state and local tax (SALT) deduction cap will increase from $10,000 to $40,000 starting in 2025, then gradually reduce after 2029.
What this may mean for you: This change is especially relevant if you own property or have high state income taxes, potentially lowering your federal tax liability if you itemize deductions.
7. Cuts to Medicaid and Food Assistance
The bill includes significant cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), adding work requirements and shifting more administrative and cost responsibilities to states.
What this may mean for you: If you or family members rely on these programs, you may want to review your health care and food security plans in advance, as state-level impacts could vary.
8. Changes to Student Loans
The legislation:
Expands Pell Grants to short-term workforce programs.
Imposes borrowing caps on federal loans for graduate and professional students.
Eliminates Grad PLUS loans and certain deferment options.
What this may mean for you: Future graduate and professional students may need to adjust education financing strategies under these new limits.
Final Thoughts
Trump’s “One Big Beautiful Bill” will have different impacts depending on your income level, family structure, retirement plans, and whether you own a business. It combines tax relief for many households and small businesses with reduced federal spending on social programs.
If you are:
- A retiree, you may see lower taxes on Social Security.
- A working family, you may benefit from higher child tax credits and new deductions.
- A small business owner or gig worker, your pass-through income deduction is now permanent.
- A service worker, new deductions may lower your taxable income temporarily.
It is wise to review your financial plan now to understand how these changes may affect your cash flow, tax strategy, and retirement projections.
Daniel S. Miller, Kaleb Robuck, Marcus Taylor, and Ashleigh Franco are investment adviser representatives of, and securities and advisory services are offered through, USA Financial Securities. Member FINRA/SIPC. A registered investment advisor located at 6020 E Fulton St., Ada, MI 49301. Milestone Financial Group is not affiliated with USA Financial Securities. Dan Miller, Kaleb Robuck, Marcus Taylor, and Ashleigh Franco are not tax advisors. Tax advice is offered by Rachel Dorr, a tax professional. Tax advice is not provided by USA Financial Securities.