[Updated as of 07/09/2025]

On July 7, 2025, the “One Big Beautiful Bill,” a major tax and spending package we’ve been closely tracking, was officially signed into law by the President. We’ve broken down the new changes to help you easily understand how this might affect you, your family, and your financial plans.

What’s in the Final Law?

Permanent Lower Taxes for Individuals

Good news! Lower tax rates and the bigger standard deduction that came from the 2017 tax law (often called the TCJA) are now permanent. This means most people will continue paying less in taxes long-term.

Increased SALT Deduction Cap

If you live in a state with higher taxes, you’ll appreciate this one: The deduction limit for state and local taxes (SALT) has increased from $10,000 to $40,000. However, this benefit phases out if your income is above $500,000.

Special Deductions for Workers and Seniors

• No Federal Tax on Tips and Overtime: Workers who rely on tips or overtime pay won’t pay federal taxes on these earnings between 2025 and 2028, as long as income stays under certain limits ($150K individual/$300K family).
• Extra Deduction for Seniors: If you’re 65 or older, you’ll get an extra deduction ($6,000 if single, $12,000 if married), helping reduce or eliminate taxes on Social Security and other income. This deduction phases out at higher income levels.

Estate Tax Exemption Increase

The exemption for estate taxes is now permanently set at $15 million per person, helping families pass more of their wealth to their heirs without tax penalties.

Good News for Business Owners

• Bonus Depreciation: If you’re investing in your business, you’ll be able to write off 100% of qualifying expenses immediately (from 2025–2029).
• Section 179: Small business owners can now immediately expense up to $2.5 million of equipment, helping with cash flow.
• Research and Development: If your business invests in research, new rules let you write off these expenses more easily through 2029.
• QBI Deduction: The 20% deduction for pass-through business income is now permanent, and it phases out gradually for high earners, rather than disappearing all at once.

Energy and Community Investments

• Clean-energy tax credits are being reduced, but you can still access some incentives for solar and electric vehicles under stricter rules.
• Opportunity Zone investments continue, especially encouraging investment in rural and underserved communities.

Families and Children Benefit Too

• A new “Trump Savings Account” allows families to contribute up to $1,000 per year per child born after 2024, offering tax-friendly growth potential.
• Child tax credits have increased, providing additional support for families.

Social Program Changes

• There are new, stricter work requirements for Medicaid and SNAP (food stamps). While this is intended to encourage employment, it may affect some families negatively.

What Did NOT Pass?

• The corporate tax rate stays at 21%. It was not reduced to 15% as previously proposed.
• The estate tax was not eliminated, just increased significantly.
• Taxes on Social Security benefits were not completely removed, although many seniors will effectively see little to no tax on their benefits due to the senior deduction.

Who Benefits, and Who Might Face Challenges?

Winners:

• Middle-income households due to lower taxes and increased deductions.
• Small and medium-sized business owners with more tax incentives.
• Families who can use the higher estate exemptions.
• Seniors benefiting from additional deductions.
• Families with young children through new savings opportunities.

Those Facing Challenges:

• Higher earners in high-tax states due to limited SALT benefits.
• Consumers and businesses involved in renewable energy due to fewer incentives.
• Lower-income households impacted by stricter Medicaid and SNAP requirements.

We understand that these changes might have mixed impacts depending on your situation. Our priority is making sure you have a clear, easy-to-follow plan.

How Gatewood Wealth Solutions is Here for You

We’re already working to help our clients:

• Understand exactly how these changes impact your unique situation.
• Adjust your strategies to make the most of new opportunities.
• Seek to ensure you’re well-prepared and protected from unintended consequences.

As always, please reach out to us if you have questions or would like personalized advice on navigating these new changes. We’re here to guide you every step of the way.

[Original Article from 06/03/2025]

On May 22, 2025, the U.S. House of Representatives narrowly passed a nearly $4 trillion tax bill known as the “One Big Beautiful Bill” by a 215-214 vote. The legislation includes the most significant tax changes proposed since 2017, including permanent extensions of key provisions from the Tax Cuts and Jobs Act (TCJA), new deductions, and revised rules for both individuals and businesses.

While this is a major step, it is not yet law. The bill now heads to the Senate, where changes are likely. The administration has signaled an interest in seeing legislation finalized by July 4, though many expect the timeline may extend into August or beyond, depending on the pace of negotiations.

Here’s what you need to know — and what we’re doing to help you prepare.

Key Highlights from the House Bill

For Individuals:

• Permanent extension of TCJA provisions, including lower individual tax rates, an expanded standard deduction, and repeal of personal exemptions.
• Increased child tax credit to $2,500 per child for tax years 2025 through 2028.
• Higher SALT deduction cap, raising the limit from $10,000 to $40,000 for households earning under $500,000, with the cap and income threshold indexed by 1% annually through 2033.
• New above-the-line deductions for seniors ($4,000), tip income, overtime pay, and up to $10,000 in U.S. auto loan interest—each subject to income limits.

Estate Planning Updates:

• Increased lifetime exemption for estate, gift, and generation-skipping transfer taxes to $15 million starting in 2026, indexed for inflation. This builds on the existing TCJA levels, which reach nearly $14 million in 2025.

For Business Owners:

• Bonus depreciation restored at 100% for qualifying assets placed in service between 2025 and 2029.
• Section 179 expensing limits increased to $2.5 million, with a $4 million phaseout threshold.
• Domestic R&D expensing reinstated for 2025 through 2029 under a new Section 174A structure.
• Section 199A (Qualified Business Income Deduction):
  • Deduction rate increased from 20% to 23% starting in 2026.
  • Phaseout reform: For service businesses, it expands eligibility and the deduction phases out gradually—reducing by 75 cents for each dollar of income over the threshold—making planning more predictable and makes the deduction permanent. (I removed the comma in this sentence.)
  • Expanded eligibility: Certain dividends from Business Development Companies now qualify for the deduction.
  • Permanence: The deduction is made permanent, ending its previous 2025 sunset.

Other Notables:

• Energy credit repeals and phaseouts: The legislation rolls back tax credits from the Inflation Reduction Act, affecting wind, solar, and battery storage projects, and potentially increasing household energy costs.
• Opportunity Zone extension through 2028, with new incentives for rural investment.
• International and reciprocal taxes, including changes to GILTI, FDII, BEAT, and new retaliatory taxes for countries imposing “unfair” taxes on U.S. firms.
• Medicaid & SNAP Changes: The bill imposes stricter work requirements for Medicaid and the Supplemental Nutrition Assistance Program (SNAP), potentially affecting millions of low-income Americans.
• Introduction of “Trump Savings Accounts”: The bill creates $1,000 “Trump savings accounts” for children born after 2024, offering tax-deferred savings with capital gains tax rates on withdrawals.
• Student Loan Forgiveness Repeal: The legislation repeals student loan forgiveness options under President Biden’s SAVE plan and introduces new repayment plans.
• Defense & Border Security Funding: The bill allocates $150 billion to defense spending and $70 billion to border security, including funding for mass deportations and border infrastructure.

What Happens Next?

The Senate is expected to take up the bill in June, possibly bypassing committee review in favor of direct negotiations. Any significant changes made by the Senate would require another vote in the House before the bill can be enacted. While many core elements of the bill enjoy broad Republican support, there are competing priorities among Senate members — particularly around energy credits, international taxation, and the scope of permanent provisions.

How Gatewood Is Preparing Our Clients

With major tax changes on the horizon and year-end planning season approaching, timing and strategy will be critical. At Gatewood Wealth Solutions, we’re preparing our clients for all possible outcomes — and we’re starting now.

Here’s how we’re helping:

• Running personalized tax scenarios under both current law and the proposed changes, so you can make informed decisions now — not after the fact.
• Identifying strategic opportunities to leverage new deductions, avoid phaseouts, and optimize entity structures and income timing.
• Reviewing estate and business plans to take advantage of proposed changes, including the increased estate exemption and favorable treatment of business investments and income.

You don’t need to wait for the final vote to start planning. Strategic action today can create lasting benefits regardless of how the final bill takes shape.

If you’re ready to review your plan or want to understand how this legislation could impact your financial goals, let’s talk. We’re here to guide you through it — with clarity, strategy, and purpose.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.