Understanding the One Big Beautiful Bill

The recently passed One Big Beautiful Bill introduces a sweeping set of changes to the U.S. tax code that will affect millions of Americans. Whether you’re a senior citizen, a parent saving for your child’s education, or simply trying to maximize your deductions, these new provisions could have a significant impact on your financial planning. Here’s what you need to know about the key changes coming your way.

Key Tax Law Changes in the One Big Beautiful Bill

Bigger deduction for seniors (65+)

Starting in 2025, people age 65 and older can get up to $6,000 more per person as a standard deduction. This benefit phases out at higher incomes.

Higher SALT deduction

The deduction for state and local taxes increases to $20,000 (single) or $40,000 (married) beginning in 2025, with limits for higher-income households.

Alternative Minimum Tax (AMT) changes

AMT rules stay in place long-term, but starting in 2026, some higher-income taxpayers (roughly $500k–$1.5M) may be more likely to owe AMT, especially if they have things like high state taxes or certain stock options.

New deductions may be available even if you don’t itemize, including:

• Charitable donations
• Tips and overtime pay
• Interest on certain U.S.-assembled car loans

Limits on charitable and itemized deductions. Beginning in 2026:

• Charitable deductions must exceed 0.5% of income before they count
• There is also a new cap on total itemized deductions

529 education plans expanded. 529 funds can now be used for:

• Job certifications and credential programs
• Tutoring and certain K-12 test fees
• Up to $20,000 per year for K-12 expenses (up from $10,000)

As with any major tax legislation, there will be many details to sort through. While some provisions offer clear benefits, others introduce new complexity that may require careful planning. It’s worth noting that some changes don’t take effect until 2026, giving you time to strategize. Consider consulting with a tax professional to understand how these changes apply to your specific situation and to make the most of the new opportunities while navigating any new limitations. Remember, tax laws can be complex, and this overview is meant as a general guide rather than personalized tax advice.

TrueNorth does not provide tax or legal advice.