Introduction

Madison: Hello, everyone, and welcome to Not just Numbers, Honest Conversations with a Financial Advisor and Lawyer. I am Madison Demora, and I’m here with Mike Garry. Mike is a financial advisor and a CFP® practitioner and the founder and the CEO of Yardley Wealth Management. He is also an estate planning lawyer, and his law firm is Yardley Estate Planning. Hey Mike.

Mike: Hey, Maddie. How are you today?

Madison: I’m, good. How are you?

Mike: Good, good.

Madison: All right, so everyone, thank you for joining us. Today, we’re discussing a major new tax law: the One Big Beautiful Bill Act, which was signed into law this July. This bill made headlines for making many of the 2017 Tax Cuts and Job Act provisions permanent, but it goes far beyond that. At 887 pages, it touches nearly every corner of the tax code, from deductions and exemptions to business planning and saving strategies. In this conversation, we’ll review the highlights and help clarify what this means for individuals, families, and business owners. All right. So let’s start with what we know is here to stay. The bill permanently locks in the lower tax brackets from the Tax Cuts and Jobs Act. Without this change, many Americans would have seen their tax rates increase starting in 2026.

Permanent TCJA Provisions

Mike: Yes, Maddie, that alone would have affected over 60% of tax filers. But the law didn’t stop there. The standard deduction increases from TCJA are now permanent as well, with the 2025 threshold set at $15,750 for single filers and $31,500 for couples. And it being adjusted for inflation going forward. For those thinking about wealth transfer or gifting, the estate and lifetime gift tax exemption is now permanently set at $15 million per individual and $30 million per couple, beginning in 2026. And again, they will be adjusted for inflation, too. That’s one thing that Congress has done recently that makes a lot of sense. For years, things weren’t adjusted for inflation, and they should be. With those higher thresholds for exemptions, that offers a lot more flexibility for long term planning. And while the “permanent” label matters, tax laws can still change in future legislative cycles, so it’s important to take a proactive approach. Several provisions in this bill are temporary and will expire in 2028 unless extended. For example, the $6,000 bonus deduction for Americans over age 65 will begin to phase out at $75,000 of income for individuals and $150,000 for couples, so it may be worth looking at income timing strategies. And the SALT deduction, you know, short for state and local taxes, was a gig topic during the TCJA debates. It allows taxpayers who itemize to deduct what they’ve paid in state and local income and property taxes on their federal return. I know, for me personally, when that went away before, I felt that was bad.

SALT Deduction Changes

Madison: So before 2018, there was no cap on that deduction. But the Tax Cuts and Job Act imposed a $10,000 limit, which hit taxpayers in high-tax states especially hard.

Mike: Yeah, that cap is still in place for, was still in place for 2024, but the new law temporarily lifts it to $40,000 starting in 2025. There’s income phaseout for income is over a half million dollars, and the cap increases slightly each year through 2029. If no further legislation is passed, it will revert to $10,000 in 2030. For clients who pay a significant amount in property and state income taxes, this is meaningful. It could change whether they itemize or take the standard deduction, and it might even factor into how income is realized or deferred in certain years. You know, we look at this closely when we run multi-year tax projections, especially for families near the itemization threshold or those in dual-income households with high property taxes.

Targeted Deductions

Madison: There’s also a new auto loan interest deduction, up to $10,000 annually on U.S. assembled vehicles, with phaseouts starting at $100,000 for individuals and $200,000 for couples. It won’t impact everyone, but it’s a good example of how the bill creates targeted, time-limited incentives. Service workers benefit from a new $25,000 tip income deduction and a $12,500 deduction for overtime pay. These may not apply to every attendee, but they matter for families with younger workers or for business owners managing payroll planning. One provision that hasn’t received much attention yet, but could have long-term implications, is the new federal Child Savings Account. This account is available only for children born between 2025 and 2028. At birth, the federal government will make a one-time $1,000 deposit into an investment account that tracks a broad U.S. stock index.

Federal Child Savings Account

Mike: And from there, families can contribute up to $5,000 per year into the account. What’s notable is that employers are also allowed to contribute up to $2,500 annually per child, without the contribution being treated as taxable income to the employee. While that employer feature might not be immediately relevant for newborns, it creates an interesting long-term structure that could evolve into broader saving tool if expanded in future legislation. All earnings within the account grow tax-deferred, and withdrawals, once allowed, are taxed at long-term capital gains rates, not as ordinary income. The legislation doesn’t specify exactly when or for what purposes withdrawals could be made, which seems kind of important, the structure resembles a long-horizon investment vehicle, possibly aimed at supporting education, home ownership or retirement down the road. For families with children or grandchildren born in that window, it’s worth paying attention. Depending on how this account evolves or expands in future legislation, it could become a foundation for multi-generational financial planning, especially when paired with traditional tools like 529 plans or custodial brokerage accounts. Speaking of 529s, the bill also expanded what those funds can be used for. Starting this year, tax-free withdrawals can cover much more than tuition, they now include curriculum materials, tutoring, educational therapies, licensing programs, and other non-college credentials. That gives families much more flexibility to support a range of educational paths. And I think that’s a great idea.

529 Plan Expansion

Madison: For those who have been impacted by the Alternative Minimum Tax, the higher exemption levels from TCJA are now permanent. However, the phaseout has increased, which may affect higher earners.

AMT and Charitable Giving Changes

Mike: Charitable giving also saw changes. Starting next year 2026, there’s a new charitable deduction of $1,000 for individuals and $2,000 for couples who don’t itemize. Which is great. And for those who do itemize, deductions kick in once contributions exceed a half a percent of AGI or adjusted gross income. These changes may impact how donors structure their gifts, including the use of donor-advised funds or timing large contributions to exceed new thresholds.

Business Provisions

Madison: For business owners, the 20% QBI deduction is now permanent. This benefits sole proprietors, S-corps, and partnerships, and brings consistency for long-term planning.

Mike: The bill also restores 100% bonus depreciation and increases the Section 179 expensing limit to $2.5 million, both of which makes it easier to write off capital investments up front. Expanded estate planning provisions are also available for small business owners looking for to transition ownership. If succession planning is a consideration, this is a good time to revisit your strategy.

Planning Strategies

Madison: While the permanent provisions provide more certainty, many of the new deductions and incentives expire in 2028. That creates a planning window, but also a potential cliff if they aren’t extended.

Mike: Yeah, we’re encouraging clients to look at income levels over the next few years. And does it make sense to realize income now to take advantage of deductions? Should charitable giving strategies change in light of the new thresholds now? We’re always looking at Roth conversion strategies, especially for those who may be in lower tax brackets today but anticipate higher rates or fewer deductions in the future. And for families or business owners who created trust or estate plans assuming the TCJA provisions would sunset, it’s time for a refresh.

Madison: The One Big Beautiful Bill is a wide-ranging update to the tax code. It affects individuals, families, and businesses in different ways, but it creates opportunities for proactive planning.

Mike: Yeah, whether you’re considering gifting, legacy planning, charitable giving, or business succession, it’s worth reviewing your strategy to ensure it reflects these changes.

Closing Remarks

Madison: If you have any questions or want help evaluating your situation, we’re here to help you think through the right next steps. Thanks for joining us today. For more information on Yardley Wealth Management or Yardley Estate Planning, you can visit our websites at yardleywealth.net and yardleyestate.net. You can also follow us on socials at Yardley Wealth Management. Don’t forget to subscribe to our YouTube channel. This podcast has been produced by Madison Demora and Mike Garry with technical and artistic help from Poe Productions.