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One Big Beautiful Bill

One Big Beautiful Bill

August 12, 2025
Recent tax law changes under theOne Big Beautiful Billhave introduced sweeping updates to tax rules, savings plans, and estate planning strategies. At Silver Penny Financial Planning, we want to ensure you’re aware of these important developments and how they may impact your financial goals. One thing to keep in mind is that this is a BIG bill meaning there is a lot under the hood. It is always best to evaluate your personal financial situation. These are a few important highlights:
Standard Deduction Permanently Increased

·      Also new charity deduction for non-itemizers. $1,000 (S/HOH) / $2,000 (MFJ) starting in 2026 • Below-the-line deduction (only available to non-itemizers)

Estate Tax Permanency
  • Thefederal estate tax exemptionis now set at$15 million per person(or $30 million per couple), effective January 1, 2026.
State & Local Tax (SALT) Deduction Changes
  • TheSALT deduction caphas been raised to$40,000through 2029, with a gradual phase-out for households earning over $500,000. *Subject to income phaseout.
Trump Children’s Savings Account
·For children born between2025–2028, the federal government will contribute$1,000 per yearto a designated savings account, giving families a head start on future expenses.
Expanded 529 Plan Uses

·  529 plans are for college, but also forqualified K–12 tuitionandvocational certifications— all on a tax-free basis. Aggregate limit: $10k/year in 2025, $20k/year starting in 2026.

Child Tax Credit Increase

·      The child tax credit increases to$2,200 per child, with inflation adjustments starting in 2025. *Subject to income phaseout.

Charity

·      As of 2026, itemizers can deduct charitable contributions only to the extent they exceed 0.5% of the taxpayer’s contribution base. Carryforwards also allowed only if this 0.5% threshold is met. 60% AGI limit for cash gifts to public charities is retained.

Benefits for Seniors and Workers
  • Individuals aged 65 and older receive an additional$6,000 deduction, gradually phasing out by 2028 (note: this does not affect Social Security taxation). * Subject to income phase out.
  • Overtime and tip incomedeductions are capped but offer tax breaks for qualifying workers.

Keep in mind that some of these changes are subject to income phase out.

Other Highlights
  • A newauto loan interest deductionof up to $10,000 applies to U.S.-made vehicle purchases through 2028.
  • Clean-energy tax creditsare being phased out, with the most substantial reductions arriving by late 2025 and 2026.

Next Steps with Silver Penny
  1. Annual Financial Review— Let’s assess how these new rules affect your specific financial situation.
  2. Update Savings & Tax Strategies— We’ll help optimize your tax planning, estate strategies, and savings goals in light of these changes.
  3. Prepare for Sunset Dates— Many of these provisions expire between 2028 and 2030. We can help you plan ahead to maximize benefits before they phase out.

At Silver Penny, we are committed to helping you navigate change with confidence and clarity.