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.