July 4th this year was kicked off with President Trump’s One Big Beautiful Bill being signed into law. Given the substantial amount of press surrounding this over the past months, including some political controversy, we figured it would be helpful to cut through the noise and break down exactly what this means for investors, retirees, and business owners.
Here are some highlights of what the bill includes, as offered by The White House:
- Tax cuts for the middle and working classes
- Increased federal income tax deduction for seniors ages 65+
- Trump Accounts for every American born in certain years
Source: https://www.whitehouse.gov/articles/2025/07/president-trumps-one-big-beautiful-bill-is-now-the-law/
How is Wall Street reacting?
Many are referring to this bill simply as an extension of Trump’s 2017 Tax Cuts and Jobs Act, however, there are plenty of changes in the new law for financial professionals to digest and discuss with their clients.
The cap on state and local deduction limits (SALT) has been raised to $40,000 from the previous $10,000. This allows individual taxpayers to claim SALT deductions up to $40,000 starting in 2025. But individuals are no longer eligible once their income surpasses $500,000. Both limits —$40k deduction and $500k income limit— will increase by 1% each year until 2029, before this higher deduction returns to $10,000 in 2030.
While there has been talk about the bill eliminating taxes on Social Security benefits, it is not entirely true when you put it that simply. What it does create instead is a temporary $6,000 federal income tax deduction for individuals 65 years and older. This allows seniors to offset a portion of their income taxes resulting from Social Security benefits through the end of 2028.
For a deeper understanding of how this impacts your individual tax situation, you should consult your tax professional. For more tax changes from the One Big Beautiful Bill, feel free to review this chart from CNBC.
Source: https://www.cnbc.com/2025/07/03/trumps-big-beautiful-bill-salt-deduction.html
Source: https://www.yahoo.com/news/still-tax-social-security-trump-173647002.html
Implications for Business Owners
In addition to the changes in SALT deductions mentioned above, business owners are subject to further changes surrounding their tax liabilities. For instance, one of the more discussed changes is no tax on tips or overtime pay. The law provides for the elimination of tax on earned tips, resulting in tips no longer being taxed as taxable income, with some caveats. Those limitations include: the deductions being limited to $25,000 and it being set to expire in 2029. Further, the exemption only applies to federal income tax, not SALT. The new tax exemption on overtime pay is also applicable at the federal level and has certain limitations but is expected to save employees who work overtime hours money on their income taxes.
The law also calls for a change in the way businesses calculate their interest deduction limits. Since 2022, those limits have been based on EBIT (earnings before interest and taxes). The new law shifts that calculation method back to using EBITDA (including depreciation and amortization). This can have the effect of saving businesses carrying high non-cash expenses from deducting more interest and potentially reducing their taxable income.
It is important to consider your unique situation as a business owner and consult your team of professionals. With some of these changes, like no tax on tips or overtime pay, focusing more on industries like food, service, and construction, it’s clear that these rules are not a “one size fits all” for all industries.
Trump Account for Newborns
You may have heard of the new Trump Accounts for newborns, but what are they, and is that what they’re actually called? In short, the new bill provides that all children born between January 1, 2025, and December 31, 2028, will be eligible to have a Trump Account – yes a Trump Account – opened on their behalf which would receive a $1,000 seed payment directly from the U.S. Treasury. There are no income limitations. The only requirements are that the child is a U.S. citizen with a valid Social Security number and that at least one parent must also have a valid Social Security number. Additionally, the account is set to track a US stock market index, however it is unknown at present exactly which index.
For more information about the Trump Accounts, specifically how they stack up against 529 accounts, feel free to visit the following article featuring our very own Jordan Kaufman.
Final Thoughts
From bigger deduction limits to Trump Accounts for babies, the One Big Beautiful Bill can feel overwhelming to digest. Hopefully, this helped make some sense of it. If you’re curious how any of these changes might impact your situation, we’re always happy to talk. Reach out through our website, and someone from our team will be in touch.
Source: https://www.cbsnews.com/news/whats-in-trump-big-beautiful-bill-senate-version/
Summary:
Trump’s new tax law, the “One Big Beautiful Bill,” brings sweeping tax changes starting in 2025. Key highlights include tax cuts for middle and working-class Americans, a higher SALT deduction cap of $40,000, and a temporary $6,000 income tax deduction for seniors over 65. The law also removes federal income tax on tips and overtime pay (with limits), and launches “Trump Accounts,” giving $1,000 seed contributions to all newborns from 2025–2028. These updates expand on the 2017 Tax Cuts and Jobs Act, impacting families, retirees, and business owners alike.
Disclosure:
Green Ridge Wealth Planning, LLC is a registered investment adviser. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment/tax advice. The investment/tax strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment/tax strategy for his or her own particular situation before making any investment decision(s). You are responsible for consulting your own investment and/or tax advisor as to the consequences associated with any investment.
The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of the AUTHOR, may differ from the views or opinions expressed by other areas of Green Ridge Wealth Planning, LLC, and are only for general informational purposes as of the date indicated.