Trump’s “One Big Beautiful Bill” has officially reshaped the tax landscape — again.
Billed as a win for workers and families, the law delivers targeted cuts, flashy perks, and fresh culture war fodder — as well as plenty of markets on Polymarket wondering what the next cut might be.
But behind the slogans are real changes that affect how Americans file, save, and spend.
Whether you’re a retiree, a server, or a small business owner, here are 10 ways the law will touch your taxes.
SALT Deduction Cap Raised to $40K
The $10,000 limit on deducting state and local taxes is now $40,000 — but only for households under $500,000. The cap phases out completely at $600,000. The change brings big relief to blue-state taxpayers but sunsets in 2030 unless extended.
Child Tax Credit Boosted to $2,200
The child tax credit rises to $2,200 per child, up from $2,000. It’s inflation-indexed but not fully refundable, meaning lower-income families may still lose out on the full benefit.
No Tax on Tips or Overtime Pay
For 2025-2028, tip and overtime income — up to $25,000 for couples and $12,500 for individuals — is tax-free. The exemption phases out above $300,000 MAGI. Critics call it performative, but it’s a real break for service workers.
New Senior Deduction
Americans 65 and older can now claim an extra $6,000 (single) or $12,000 (married) deduction. It phases out at $75K/$150K MAGI. For fixed-income seniors, this could mean thousands in savings.
$1,000 for Every Newborn
Babies born from 2025—2028 get a $1,000 “Trump Account” at birth. Parents can contribute up to $5,000 annually. Details are thin, but the accounts are tax-advantaged and intended to encourage long-term savings.
Corporate and Individual Cuts Made Permanent
The 2017 Trump tax cuts — originally set to expire — are now locked in permanently. That includes lower corporate rates, new individual brackets, and the higher standard deduction.
Pass-Through Deduction Now Permanent
Small businesses structured as LLCs, S corps, or sole proprietorships can keep claiming the 20% pass-through deduction. Making it permanent ensures continued relief for freelancers and business owners — but also for wealthy professionals.
Defense and Border Wall Spending Rises
The law pumps $150B into defense and $150B into border enforcement. To offset that, it includes $1.2T in cuts to Medicaid and SNAP over a decade. That’s already triggering political and legal pushback.
Deficit Projected to Climb by $2.4 Trillion
The Congressional Budget Office estimates the law will add $2.4 trillion to the deficit over 10 years — even before accounting for dynamic growth models.
10.9 Million Could Lose Health Insurance
CBO projects 10.9 million more uninsured Americans due to ACA subsidy cuts and Medicaid rollbacks. Combined with social spending cuts, this could define the law’s long-term political fallout.
