What the “One Big Beautiful Bill” Could Mean for Your Financial Future
At Pelleton Capital Management, we view comprehensive financial planning as a five-pillar strategy: cash flow, risk management, investment planning, estate planning, and tax planning. While our core focus is on the first three, we regularly collaborate with our clients’ attorneys and CPAs to help ensure the remaining two—estate and tax—are properly aligned with the overall plan.
With the recent passage of what’s being called the “One Big Beautiful Bill,” many headlines are zeroing in on the politics. But we’re paying attention to what really matters: how this legislation could influence the financial decisions you make going forward.
The tax landscape is shifting, and while we don’t give tax advice, we believe your financial plan should anticipate and adapt to these changes. That’s why we’re working closely with one’s tax professionals—to help ensure you’re making thoughtful decisions that support long-term financial success and keep more of your money working for you.
1. Marginal Tax Brackets Extended — For Now
The lower brackets from the 2017 tax law remain in place. The verbiage will describe this as making the brackets “permanent”, but we know nothing is permanent when it comes to politics, because a future Congress can always change it again. But these rates are “permanent” from the standpoint that they aren’t set to expire at a certain time (as they would have at the end of 2025 if Congress hadn’t passed this bill now).
2. Standard Deduction made permanent
The higher standard deduction that would have also expired after this year was made permanent in the BBB. This will continue to create a more simplified tax filing process for many, because most Americans will continue simply taking the standard deduction instead of itemizing deductions.
3. Major changes to the SALT (State and Local Tax) cap
You can now deduct significantly more state and local taxes on your federal return than you could under the previous law. This is good news for people with high incomes and large property tax bills. This only applies to people who itemize their deductions, but now there might be people who will itemize that wouldn’t have previously done so when they were limited to $10,000 in SALT deductions.
4. Senior Citizen deductions
There’s now an additional deduction of $6000 per person ($12,000 for MFJ) for people over the age of 65, provided that they stay under certain income thresholds. This is being framed as “eliminating taxes on Social Security” which isn’t actually what’s happening, although it will have the effect of reducing income for some folks to the point that they won’t pay taxes on SS moving forward. Not permanent, this expires after 2028.
5. Roth Opportunities Are Still Alive
No major restrictions to Roth conversions made it into this bill. That’s good news.
6. Bonus depreciation (for small businesses and landlords)
There’s a 100% bonus depreciation that applies to qualified business or rental property purchases made on or after January 19th, 2025.
7. What Else Is of Note in the Bill
Charitable Giving: An above-the-line deduction for non-itemizers (1K/2K for single/married)
Auto loan interest deduction: Also, above-the-line applies to cars purchased in 2025 or later and car must have final assembly in the US.
EV credits going away: Tax credits on electric vehicles phasing out after Sept 30 of this year.
No tax on tips up to $25,000
Borrowing limits on future student loans
Slight increase to the child tax credit
This tax bill didn’t shake the whole system, but it’s a signal that change is coming. There are some new opportunities for retirees and pre-retirees to take advantage of, but it’s still a relatively short window to act before some of these new components expire in 2028, or before a new Congress changes things again.
Are You a Winner or A “Loser” in The One Big Beautiful Bill
The new tax bill has just passed, but will it actually help you? Let’s look at who stands to benefit, who might lose out, and the strategic moves to consider now while the rules are fresh.
Who Wins This Law?
Retirees and pre-retirees benefit from the expanded standard deduction and age 65+ deduction
High-net-worth clients gain time and flexibility from permanent tax brackets and estate exemption
Charitable givers who now get a small above-the-line deduction even if they don’t itemize
Who Might Lose Out?
Married couples with an income above $150K who could phase out some benefits (like tip/overtime exclusion or age 65 deduction)
People in low-tax states who don’t gain much from the SALT (State and Local Tax) cap change
Clients with no business/rental exposure who miss bonus depreciation benefits
What Strategic Moves Should Savers Make Now?
Evaluate Roth conversions while rates are locked in
Review estate and gifting strategies with the higher exemption in mind
Consider bunching charitable contributions to make the most of the new deduction
What Else Might Trip People Up in This New Landscape?
Watch for implementation windows. Some things have odd start dates like mid-January 2025 or don’t go into effect until 2026.
Be careful when making big changes to your palm so you don’t make mistakes.
This bill opens a few smart doors, but not forever. The earlier you understand what changed (and what didn’t), the more confidently you can shape your retirement strategy around it.
One Big Beautiful Bill Myths Debunked
Big tax law changes always bring big rumors. But before you assume Social Security is now tax-free or that you’re getting a $40K deduction just for breathing, let’s set the record straight on what this new bill didn’t actually do.
“Social Security is no longer taxed.” Nope. Social Security benefits are still subject to income tax, depending on total income.
“This new law means tax cuts for everybody.” Not quite. Some benefits like the extra $6,000 deduction for age 65+ phase out if your income is too high. Others, like the SALT deduction increase, only really help people in high-tax states.
“The tax brackets are permanent now, so I don’t need to worry.” “Permanent” in Washington usually means “until the next administration.”
“A $15M estate tax exemption means estate planning doesn’t matter anymore.” Exemption applies to federal estate tax. But states have their own rules. And a good estate plan is about much more than just taxes.
“Car loan interest is now fully deductible.” There’s a cap ($10,000), it’s temporary, and you must meet certain income and vehicle criteria. It’s not a blanket write-off.
“I can skip itemizing and still get a huge deduction for giving to charity.” Yes, there’s an above-the-line deduction, but it’s capped at $1,000 for singles and $2,000 for couples. Still a good benefit, but not massive.
Bottom line
Big legislation often brings big confusion—but that’s exactly where a well-crafted financial plan proves its value. It helps cut through the noise, separate fact from fiction, and keep you focused on what truly matters for your future. As the landscape shifts, we’ll continue tracking the details and working with your tax professional so you can make informed decisions with clarity and confidence.
If you have questions or wonder how this may affect your plan, let’s talk. 480-513-1830
All the best,
Charles
Charles C. Scott AIF®, CDP®
ACCREDITED INVESTMENT FIDUCIARY®CERTIFIED DEMENTIA PRACTITIONER®
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