President Donald Trump’s “Big Beautiful Bill” was signed into law in early July, and we’ve compiled some of the most impactful parts for your finances and daily life, including:
- Tax Cuts, Credits and Gifts:
- Extension of the 2017 tax cuts: This is the largest item in the bill which extends lower individual tax rates, doubles the standard deduction, and increases the Child Tax Credit.
- Increased state and local tax deduction: The bill increases the deduction for state and local taxes, known as SALT. It raises the cap from $10,000 to $40,000 and increases 1% annually, dropping to $10,000 for AGI over $600,000. The deduction begins in 2025 and falls back to $10,000 in 2029.
- Deducting car loan interest: Car buyers could deduct up to $10,000 annually in car loan interest payments if they buy a vehicle assembled in the U.S. The deduction phases out between $100K and $150K and between $200K and $250K if you file jointly.
- Increased estate tax exemption: Allows people to pass $15 million tax-free to their heirs. Without the change, the almost $14 million exemption would have expired at the end of 2025 and reverted to just over $7 million.
- Increased child tax credit: Raises the child tax credit from $2,000 to $2,200. After 2025, it will be adjusted for inflation.
- Savings accounts for children: Children born between 2025 and 2028 will receive $1,000 each to open special savings accounts. Additionally, savings accounts can be opened for children ages 8 and younger, and after-tax contributions to the account are limited to $5,000 annually until the child is 18. Savings can be used after the child turns 18.
- Additional deduction for farmers 65+: Extra $6K deduction per spouse for four years, phasing out at higher income levels.
- Charitable deductions: A new above-the-line deduction for charitable gifts of $1,000 for single filers and $2,000 for joint filers means itemization is not required to deduct the gift.
- Policy Updates Impacting U.S. Farmers and Business Owners:
- Additional support for farmers: $10B extra support in 2026 due to higher reference prices.
- LLC & S Corporation payments: LLCs and S corps will be treated like general partnerships for farm payments.
- Farm income calculation: Gains from equipment sales, agri-tourism, and direct marketing count as farm income.
- Crop insurance subsidies: 3-5% subsidy increase, with 10-year premium support for beginning farmers.
- Bonus depreciation & Section 179: 100% bonus depreciation for assets post-Jan. 19, 2025, and Section 179 increased to $2.5M in 2025.
- Qualified Business Income (QBI) deduction: 20% deduction for farm income made permanent with minor changes.
We know these changes will impact many of our clients, and we want to ensure we are here to provide guidance and assistance as you navigate the new policy and how it may apply. Please reach out to our team with any questions you have at (515) 225-6000.
