The New Tax Bill: Why this bill deserves your attention

Taxes change. Sometimes gradually, sometimes dramatically. The new tax bill currently working its way through Congress could rewrite how retirees, high-income earners, and small business owners manage their money — for years to come.

If passed in its current form, the legislation (a follow-up to the 2017 Tax Cuts and Jobs Act, or TCJA) would lock in lower rates, expand deductions, and create new planning opportunities. And while some details may shift before the ink dries, it’s not too early to start thinking about how to take advantage.

Let’s break down what’s in the bill, what’s not, and what you should be thinking about now.

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TCJA Tax Cuts Get Locked In

One of the biggest takeaways: many of the TCJA’s temporary tax cuts would become permanent. That includes the lower tax brackets and the higher standard deduction.

Temporary Standard Deduction Bump (2025–2028):

• Joint filers: +$2,000

• All others: +$1,000

  
  

For retirees and high earners who don’t itemize, this is a straightforward way to reduce taxable income — at least for a few years.

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Estate and Gift Tax Exemption Gets a Major Boost

If you’re thinking about legacy planning, this is huge. Starting in 2026:

• Estate/gift tax exemption rises to $15M (single)

• Or $30M (joint filers)

• Indexed for inflation moving forward

  
  

That gives wealthy families more flexibility to pass on assets tax-efficiently — whether via trusts, lifetime gifts, or other estate strategies.

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Introducing “Trump Accounts” for Children

This new savings tool targets parents and guardians:

• After-tax contributions for children under 18

• Tax-advantaged withdrawals for:

  • Education

  • First-time home purchase

  • Starting a business

    
    

Bonus: Parents of newborns (between 2025 and 2028) could receive a $1,000 federal seed credit to get things started.

While these accounts are new and details will evolve, they represent a shift toward incentivizing early financial independence.

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SALT Deduction Cap: Expanded, But With Limits

High earners in states with steep income and property taxes have long bristled at the $10,000 SALT deduction cap.

Proposed Change: Raise the cap to $40,000, with a phase-down for higher-income taxpayers.

It’s not a full repeal, but for many high-income families, it could meaningfully lower federal tax bills.

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Short-Term Deductions Worth Grabbing (2025–2028)

Several temporary deductions are being proposed — some with quirky but practical benefits:

• No federal tax on tips or the premium portion of overtime

• Auto loan interest (up to $10,000) deductible if the vehicle is U.S.-assembled

• $4,000 senior deduction for those 65+, though it phases out at higher incomes

  
  

Even if temporary, these breaks could be significant for those with flexible income or major purchases ahead.

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Expanded HSA and 529 Plan Uses

The bill stretches the usefulness of existing savings tools:

HSAs could now be used for:

• Gym memberships

• Nutritional programs

• Professional credentialing

  
  

529 Plans would now cover:

• Tutoring

• Vocational training

• Non-traditional educational pathways

  
  

For retirees re-skilling, or families supporting non-college-bound children, this is a welcome (and practical) change.

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Big Wins for Small Business Owners and Entrepreneurs

Business owners stand to benefit significantly from a few core provisions:

Section 199A Deduction Made Permanent

• Pass-through deduction (currently 20%) increases to 23%

• Tighter income limits for service businesses, such as law and consulting

  
  

This move provides long-term clarity and tax relief for S-corps, LLCs, and sole proprietors.

100% Bonus Depreciation & R&D Expensing Return (2025–2029)

If you’re planning to invest in equipment, vehicles, or innovation—this is your window.

• Full expensing on short-lived assets

• Immediate write-off for R&D-related expenses

  
  

These deductions reduce taxable income and encourage reinvestment, especially during high-growth years.

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What’s Missing from the Bill?

Some highly anticipated changes did not make it into this version:

• No repeal of taxes on Social Security income

• Green energy credits from the Inflation Reduction Act have been rolled back or restricted

  
  

So if you were banking on credits for solar, EVs, or energy-efficient home upgrades, hold that thought. These provisions may return in future legislation, but they’re not in this draft.

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What Should You Do Now?

Even though the bill hasn’t passed yet, this is the perfect time to get proactive.

Here are a few smart moves to consider:

• Run a Roth conversion scenario while tax brackets remain low

• Revisit your estate plan to take advantage of the higher exemption

• Accelerate business purchases or R&D spending ahead of the 2025–2029 window

• Explore using 529s and HSAs more creatively under the expanded guidelines

  
  

Talk to your CPA or advisor about timing. These changes create short-term opportunities but could also shift the long-term planning landscape.