4 ways the 'Big Beautiful Bill' could affect your household finances

Chances are, you've read about "The One Big Beautiful Bill Act" (or OBBBA), signed into law on July 4, 2025. But what aspects of the massive legislation might apply to your personal finances? As you plan for yourself and your family, consider these four areas and insights from the Chief Investment Office (CIO) National Wealth Strategies team.

• More uses for 529s. The list of "qualified higher education expenses" has expanded to include curriculum materials, books, test prep and other expenses for grades K-12. Starting in January 2026, the limit on distributions (i.e., expenses) for K-12 jumps from $10,000 to $20,000 per calendar year per beneficiary.
• Seeding future savers. Kids under 18 can get a head start on saving through a market-based "Trump Account," which, like traditional IRAs, allows potential investment earnings to grow tax-deferred. Starting July 4, 2026, you may contribute — in cash only — up to $5,000 per child per year to a Trump Account. (The cap will be indexed for inflation starting in 2028.) Children who are born in 2025 through 2028, have a valid Social Security number (SSN), and have a parent with a valid SSN will be eligible to receive $1,000 from the government to seed their account. Only certain investments are allowed. Account holders must reach age 18 to withdraw funds. Consult your tax professional to learn more.
• CTC grows up. The maximum child tax credit (CTC) was increased permanently to $2,200 (from $2,000) in 2025, to be adjusted annually for inflation starting in 2026 — potentially freeing up more money for childcare or other costs.

• A generous pinch of SALT. If you itemize deductions or are considering it, the big news is a boost in the state and local tax (SALT) deduction. The deduction limit will increase for individuals from $10,000 to $40,000 this year and beginning in 2026, will increase by 1% annually before returning to $10,000 in 2030. The limit is $20,000 per person for married couples who file separately. (The additional $30,000 deduction begins to phase out for taxpayers with modified adjusted gross income over $500,000 and is eliminated at $600,000).
• Higher standards. The OBBBA also raises the standard deduction to $31,500 for married couples filing jointly (up from $30,000) and $15,750 for single filers (from $15,000), meaning that fewer people will benefit from itemizing. Ask your tax professional for advice about your situation.
• A senior discount. If you're 65 or older, a $6,000 annual tax deduction for individuals ($12,000 for couples) goes into effect immediately but ends in 2028. It could help you meet expenses or stash additional savings. The deduction phases out for seniors with modified adjusted gross incomes (MAGI) above $150,000 for married couples and $75,000 for single filers. Contrary to some reports, the deduction does not eliminate taxes on Social Security benefits; rather, the phase out takes into account your total income, which includes Social Security benefits. Note that eligible seniors may claim the tax deduction whether they itemize or not.

• No tax on tips. If you work in a field that "customarily" receives tips (as defined by the IRS), a temporary new provision, in effect through 2028, will allow you to deduct up to $25,000 of cash tips you receive. The deduction begins to phase out for taxpayers with MAGI is over $300,000 for married couples or $150,000 for individuals.
• Or overtime income. The same benefit applies if you receive qualified overtime compensation. If you're wondering how qualified overtime compensation is defined, it's wages that exceed the regular rate at which you're employed. This doesn't apply to qualified tips (but see above). The deduction is capped at $12,500 for single filers ($25,000 for married couples filing jointly). It's phased out for taxpayers in the same way as qualified tips. Beginning in 2026, qualified overtime compensation will be a separate line on Form W-2, and income tax withholding on overtime will be adjusted under new rules to be determined by the IRS.

• For homes. Consider accelerating planned energy-efficient purchases to garner tax credits while they're still available, the National Wealth Strategies team suggests. The legislation curtails a host of green incentives, including the energy-efficient home improvement (if placed in service after December 31, 2025) and residential clean energy tax credits (or expenditures made after December 31, 2025) and the new energy efficient home credit (for homes acquired after June 30, 2026).