One Big, Beautiful Bill to Rule Them All (5 Things Investors Actually Need to Know)

Well, it's finally here!

The One Big Beautiful Bill Act—to rule them all!

At first glance, the title of this new economic package makes it sound like Congress just handed out massive tax cuts for everyone.

In reality?

It’s an 870-page marathon of legislative jargon that tinkers with income tax, Social Security, Medicare, estate planning, small business rules—you name it.

“Sounds like a fun read,” said no one ever.

Don’t worry—we’ve got you covered.

As Certified Financial Planners and CPAs, it’s our job to read the fine print (so you don’t have to) and break it down into what actually matters to you, along with the tax planning opportunities you can take advantage of right now.

🔑 Key Takeaways (The Short Version)

• Tax cuts are extended, standard deductions are a bit higher, and there’s a new $6,000 “Senior Bonus Deduction” for folks 65+.
  

• Social Security stays taxable (sorry—no changes to that 40-year-old formula).
  

• The SALT cap jumps to $40,000 but starts phasing out at $500,000 of income.
  

• No HSA contributions for Medicare enrollees, but there’s a workaround if your spouse is still working.
  

• Other new tax breaks include:
  

  • A charitable deduction for non-itemizers
    

  • A car loan interest deduction (new cars only, 2025–2028)
    

  • An increased estate tax exemption
    

  • Partial tax relief on tips and overtime income

    
    

🧾 1) Tax Cuts & Higher Standard Deductions (For Now)

Remember the 2017 Tax Cuts and Jobs Act (TCJA)? It lowered federal income tax rates but was set to expire in 2025.

The One Big Beautiful Bill makes those tax cuts “permanent.” (And by “permanent,” Congress really just means until they decide to change it again.)

2025 Standard Deduction:

Filing Status	2025 Deduction
Married Filing Jointly	$31,500
Single	$15,750
Head of Household	$23,625

If you skipped Tax 101 (or were never offered the course), here’s the gist: The standard deduction reduces your taxable income. The higher the deduction, the lower your tax bill.

For context, these new amounts are about 5% higher than last year, so don’t expect a huge swing in your refund if you typically take the standard deduction.

However, itemizers could see real savings this year—we’ll get to that in a bit.

🧓 2) Social Security Still Taxable (Yep, Really)

There was talk of eliminating federal taxes on Social Security benefits, but Congress punted on that one—again.

The same 0%–85% taxability formula remains in place, and unfortunately, the income thresholds used to calculate that formula haven’t been adjusted for inflation since Reagan was president.

While senior citizens aren't getting any tax breaks on social security, they will be getting rewarded for being born prior to December 31, 1960.

🎁 3) The New “Senior Bonus Deduction” ($6,000 Per Person)

Finally, some good news!

If you’re 65 or older, you now get a $6,000 “Senior Bonus Deduction” on top of both the standard deduction and the usual age 65+ deduction.

Here's how it breaks down for single filers and married couples filing jointly:

Single, Age 65+:

Deduction Type	Amount
Standard Deduction (2025)	$15,750
Age 65+ Additional	$2,000
Senior Bonus Deduction	$6,000
Total Deduction	$23,750

Married Filing Jointly, Both 65+:

Deduction Type	Amount
Standard Deduction (2025)	$31,500
Age 65+ Additional	$3,200
Senior Bonus Deduction	$12,000
Total Deduction	$46,700

A Few Things to Know:

• You can use this deduction whether you itemize or take the standard deduction.
  

• There’s a phaseout of 6 cents per dollar over the following MAGI (modified adjusted gross income) thresholds:

Filing Status	Phaseout Starts	Gone at
Married Joint	$150,000 MAGI	$250,000
Single	$75,000 MAGI	$175,000

‼️ Planning Opportunity: Tax-Free Roth Conversions

If your income is under the phaseout limits, you could use the Senior Bonus Deduction to make tax-free Roth conversions.

Example:

Jerry & Elaine Seinfeld (both 65) are married and have the following:

• $65,000 from Social Security
  

• $50,000 from a pension
  

• $35,000 in IRA distributions

The Seinfelds can use their senior bonus deduction to convert $12,000/year into a Roth IRA, tax-free, from now until 2028. That’s $48,000 in conversions and $5,760 in tax savings over four years (assuming a 12% tax rate).

🧾 4) SALT Deduction Raised (With a Catch)

Before this bill, 90% of Americans took the standard deduction because the SALT (State and Local Tax) deduction was capped at $10,000, limiting most people to the standard.

Now, the cap is temporarily increased to $40,000, which is great news for high-tax state residents and folks who still have a mortgage and are charitably inclined, as they'll now have a better opportunity to itemize.

But, of course, there’s an income phaseout based on your MAGI that breaks down like this:

New SALT Cap	Phaseout Starts	Gone at	Phaseout Rate
$40,000	$500,000 MAGI	$600,000	30% per dollar over

In addition to the phaseout, the increased SALT cap expires after 2029 unless Congress extends it.

‼️ Planning Opportunity: Stack Your Deductions

If your SALT + mortgage interest + charitable giving + other allowable itemized deductions exceeds the standard deduction ($31,500 for a joint filer), and your MAGI is, or can be reduced under the phaseout limit, itemizing might finally pay off again!

Example:

Jack & Jill Hill have the following:

• $590,000 MAGI in 2025 (comprised of Jack's W2 of $190,000 and Jill's S. Corp income of $400,000)
  

• $30,000 SALT
  

• $11,000 mortgage interest
  

• $5,000 charitable giving

  
  

• The only retirement savings is Jack and Jill hoarding cash in a money market paying 4%

The Hills have never itemized before and won't be able to again this year as their MAGI is near the high end of the phaseout threshold—but if Jill opens a Solo 401(k) and contributes $70,000, and Jack maxes out his 401(k) at $23,500, their MAGI drops enough to qualify for the full SALT deduction.

Result? $46,000 in itemized deductions, saving them $2,900 in taxes (at a 20% rate) had they gone the standard route. 👊

🚫 5) No HSA Contributions for Medicare Enrollees

This one almost made it into the final bill—but it got scrapped.

Once you enroll in Medicare, you still can’t contribute to an HSA (Health Savings Account).

Workaround:

If your spouse is under 65, still working, and covered by a High Deductible Health Plan (HDHP), you're eligible to make the following:

• $8,550 family contribution (2025)
  

• $1,000 catch-up (age 55+)

  
  

Remember, the HSA is one of the best retirement savings accounts in the marketplace, as it offers triple-tax savings to investors: tax-deductible contributions, tax-free growth, and tax-free distributions if the funds are used for qualifying health- and medical-related expenses.

🥳 Bonus Points: Other Changes to Know

Charitable Giving

• Standard deduction filers: Deduct up to $2,000 (MFJ) or $1,000 (Single) starting in 2026.
  

• Itemizers: Must give more than 0.5% of AGI for charitable deductions to count.

  
  

Car Loan Interest

• Deduct up to $10,000 of interest on new, personal-use cars assembled in the U.S.
  

• 2025–2028, phased out above $200k MAGI (MFJ) / $100k (Single)

Pro tip: Don’t buy a car just for the tax deduction. Please.

Estate Tax Exemption

• New limit: $15 million per person ($30 million for couples).
  

• Portability rules stay in place.

  
  

Tips & Overtime

• No federal income tax on up to $25,000 of tips and $25,000 of overtime (2025–2028). This applies to individuals with MAGI of $150,000 or less ($300,000 for joint filers)
  

• Payroll and state taxes still apply.

  
  

Pass-Through Entity (PTE) Taxes

• PTE owners can still use SALT workaround deductions through their business.

  
  

“Trump Accounts” (New Retirement Accounts for Kids)

• $1,000 federally funded for each child born 2025–2028.
  

• Parents can contribute up to $5,000/year (not deductible).
  

• Grows tax-deferred but taxed at ordinary income rates, not capital gains.

  
  

🎯 Final Thoughts

The One Big Beautiful Bill isn’t perfect, but it creates new planning opportunities for investors and retirees. Some are permanent, some are temporary, and some (like the Social Security tax rules) are stuck in the 80s.

Our advice?

Focus on what you can control, ignore the political noise, and build a retirement plan that works—no matter what Congress throws at us.