Investment

Explaining the “One Big Beautiful Bill”: What It Means for Your Taxes

Jul 9, 2025

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By Charles Luong, ChFEBC ℠ and Ajay Vadukul, CFP®

Congress has just approved sweeping tax reform that reaches into nearly every corner of your financial life. Here’s what you need to know and how to use these changes to your advantage.


  1. TCJA Tax Cuts Become Permanent


Key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) were set to expire after 2025. Now they’re locked in for good, with annual inflation indexing for bracket thresholds. This means the lower rates you’ve enjoyed aren’t going away and you won’t slip into a higher bracket just because of cost‑of‑living increases.


2. Bigger Child Credit and Standard Deduction

  • Child Tax Credit rises to $2,200 per child for 2025, with up to $1,400 refundable. The phase‑out thresholds remain $200,000 MAGI for singles and $400,000 MAGI for married couples filing jointly (TaxAct Blog).


  • Standard Deduction increases to $15,750 for singles and $31,500 for married filing jointly (TaxAct Blog).


3. Raised Estate and Gift Exemptions

  • Single taxpayers: exemption increases from $13.99 million to $15 million.

  • Married couples: exemption increases from $27.98 million to $30 million.


4. Extra Break for Social Security Recipients


Taxpayers aged 65+ get an additional $6,000 standard deduction for 2025–2028, phasing out between $75,000 and $175,000 MAGI for singles ($150,000–$250,000 for joint filers) (TaxAct Blog).


5. SALT Deduction Cap Increased

  • SALT cap jumps from $10,000 to $40,000 for households under $500,000 MAGI, then phases back to $10,000 above that level. Indexed annually through 2029 (TaxAct Blog).

  • Applies only if you itemize deductions.

6. No Federal Tax on Tips

  • Above‑the‑line deduction up to $25,000 per year for tipped income (2025–2028).

  • Phases out starting at $150,000 MAGI (TaxAct Blog).


7. No Tax on Overtime Pay

  • Above‑the‑line deduction capped at $12,500 for singles, $25,000 for joint filers (2025–2028).


  • Phases out at $150,000 MAGI (single) and $300,000 MAGI (joint) (TaxAct Blog).


8. Auto Loan Interest Deduction

  • Above‑the‑line deduction up to $10,000 for interest on qualified U.S.‑assembled vehicle loans (2025–2028).

  • Phases out at $100,000 MAGI (single) and $200,000 MAGI (joint) (TaxAct Blog).


9. “Trump Accounts” for Newborns


Traditional‑IRA–style accounts seeded with a $1,000 federal deposit for every child born 2025–2028. No withdrawals before age 18; $5,000 annual contribution limit (BenefitsPRO).



Why Expert Planning Matters: Three Real‑Life Scenarios

With so many benefits now gated by MAGI limits: child credits, SALT deductions, Saver’s Credits. Every dollar you shift into pre‑tax vehicles or HSAs both builds savings and preserves other valuable breaks. Here’s how a planner plus a tax pro can make it happen.



Example 1: Securing the Full Child Tax Credit


Challenge
The Child Tax Credit of $2,200 per child phases out above $400,000 MAGI for married filers (TaxAct Blog). Maria and Antonio expect $405,000 AGI so they’d lose $200 of credit for each dollar over the threshold.

Solution
Their planner boosts Antonio’s 401(k) deferral by $10,000 and maxes Maria’s 2025 HSA deposit of $3,850. That drops their MAGI to $391,150 back under the $400,000 cutoff.

Payoff They reclaim the full $4,400 credit for two kids, plus enjoy $13,850 in pre‑tax savings.


Example 2: Capturing Every Dollar of SALT Deductions


Challenge
Priya in California owes $25,000 in SALT. Under the new law, the $40,000 cap applies only to MAGI under $500,000 (TaxAct Blog). At $510,000 AGI, she’d get zero benefit.

Solution
Her tax pro shifts $20,000 into a traditional IRA and elects $3,000 in FSA childcare contributions. MAGI falls to $487,000 so she deducts the full $25,000 state and local taxes.

Payoff
At a 28 percent bracket, that’s roughly $7,000 saved in federal tax.


Example 3: Maximizing the Saver’s Credit


Challenge
The Saver’s Credit (up to 50 percent on the first $2,000 saved) phases out entirely above $23,000 AGI for singles (TaxAct Blog). James, a teacher earning $25,000, would miss out.

Solution
His planner front‑loads $3,850 into his HSA and defers $500 into a dependent‑care FSA. His AGI drops to $20,650—well under the $23,000 threshold.

Payoff
He nets a full $1,000 Saver’s Credit, on top of his HSA’s tax‑free growth and his employer’s 403(b) match.


Conclusion


The One Big Beautiful Bill unlocks a range of valuable tax breaks, but many depend on keeping your income under strict limits. That makes proactive planning with pre‑tax accounts and HSAs more important than ever. Charles, Lucas and Ajay are here to help you navigate these changes and keep more money in your pocket. Reach out today so we can map out the right mix of 401(k) contributions, HSA deposits, FSA elections and other strategies to lower your MAGI, preserve every credit and deduction you qualify for, and position you for long‑term success. 


Keep in mind that most of these benefits take effect in 2025, so now is the time to plan.


Disclosure: The views expressed herein are exclusively those of Endeavor Advisors, LLC (‘EAL’), and are not meant as investment advice and are subject to change. All charts and graphs are presented for informational and analytical purposes only. No chart or graph is intended to be used as a guide to investing. EA portfolios may contain specific securities that have been mentioned herein. EAL makes no claim as to the suitability of these securities. Past performance is not a guarantee of future performance. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. All opinions expressed herein are subject to change without notice. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.

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See how we can help you live your best life in retirement

2801 E Camelback Rd,
Suite 202
Phoenix, AZ 85016

3655 Torrance Blvd

3rd floor,

Torrance, CA 90503

Let's Talk

See how we can help you live your best life in retirement

2801 E Camelback Rd,
Suite 202
Phoenix, AZ 85016

3655 Torrance Blvd

3rd floor,

Torrance, CA 90503

Our team of experts is ready to discuss your needs and tailor a solution that works for you.

Testimonials were provided by current clients of Endeavor Advisors. The clients were not compensated, and no material conflicts of interest exist that would impact any of these testimonials, client testimonials are not representative of the experiences of all Endeavor Advisors clients and do not provide guarantee of future performance or similar services.​Check the background of your financial professional on FINRA's BrokerCheck.​There are no warranties implied.


The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not alliliated with the named representative, broker - dealer, state - or SEC - registered investment not affiliated with the named representative, broker - dealer, state - or SEC - registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.​ Read Full Disclosure >


Information presented on this site is for informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any product or security. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.​The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. We make no representation as to the completeness or accuracy of the information provided at these websites.​Copyright © 2024 Endeavor Advisors LLC. All rights reserved.

Our team of experts is ready to discuss your needs and tailor a solution that works for you.

Testimonials were provided by current clients of Endeavor Advisors. The clients were not compensated, and no material conflicts of interest exist that would impact any of these testimonials, client testimonials are not representative of the experiences of all Endeavor Advisors clients and do not provide guarantee of future performance or similar services.​Check the background of your financial professional on FINRA's BrokerCheck.​There are no warranties implied.


The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not alliliated with the named representative, broker - dealer, state - or SEC - registered investment not affiliated with the named representative, broker - dealer, state - or SEC - registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.​ Read Full Disclosure >


Information presented on this site is for informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any product or security. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.​The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. We make no representation as to the completeness or accuracy of the information provided at these websites.​Copyright © 2024 Endeavor Advisors LLC. All rights reserved.

Our team of experts is ready to discuss your needs and tailor a solution that works for you.

Testimonials were provided by current clients of Endeavor Advisors. The clients were not compensated, and no material conflicts of interest exist that would impact any of these testimonials, client testimonials are not representative of the experiences of all Endeavor Advisors clients and do not provide guarantee of future performance or similar services.​Check the background of your financial professional on FINRA's BrokerCheck.​There are no warranties implied.


The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not alliliated with the named representative, broker - dealer, state - or SEC - registered investment not affiliated with the named representative, broker - dealer, state - or SEC - registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.​ Read Full Disclosure >


Information presented on this site is for informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any product or security. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.​The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. We make no representation as to the completeness or accuracy of the information provided at these websites.​Copyright © 2024 Endeavor Advisors LLC. All rights reserved.