On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law—an 870-page reconciliation package that reshapes federal policy across taxes, healthcare, energy, defense, education, and more. It’s the legislative centerpiece of the Trump administration’s second term, and whether you’re a business owner, retiree, or someone in the middle of your career, this law has the potential to change how you spend, save, and plan.

This post is an initial review—a summary of what we believe are the most relevant provisions for individuals and families. Many parts of the legislation require regulatory interpretation or state-level implementation, so things may shift. But for now, here’s what we’re watching and discussing with our clients.

Taxes: Locked-In Rates, New Deductions, and Planning Nuances

The One Big Beautiful Bill Act makes permanent several provisions that were set to sunset under previous tax law, while adding targeted deductions designed to appeal to working families and business owners. While some of the changes are headline-grabbing, the details—phaseouts, qualifications, and stacking rules—will matter even more in practice.

• Tax rates and income brackets are now permanent. The individual tax brackets introduced under the 2017 Tax Cuts and Jobs Act are no longer set to expire after 2025. This includes the lower marginal rates across most income levels, preserving a tax structure that many high-income earners and business owners have relied on for the past several years. With permanence comes predictability—giving planners more confidence in long-term tax strategy.
• The standard deduction is increasing slightly. The deduction rises by $750 for single filers and $1,500 for joint filers, with both amounts indexed to inflation going forward. While this is modest, it slightly reduces taxable income for households that don’t itemize. Clients nearing the itemization threshold may need to reevaluate bunching strategies or charitable giving timing.
• The 20% Qualified Business Income (QBI) deduction is made permanent. This change locks in a major benefit for pass-through business owners, including sole proprietors, S corporations, and partnerships. The deduction applies to qualified income up to certain thresholds, with phaseouts and additional tests for higher earners. For service-based businesses near the income cap, entity structure, wage planning, and retirement plan contributions remain critical tools for maximizing this deduction.
• A new SALT cap of $40,000 applies through 2030. The state and local tax (SALT) deduction, previously capped at $10,000, is temporarily increased to $40,000 for married couples filing jointly. This will provide some relief to taxpayers in high-tax states, though the benefit phases out for very high earners and is scheduled to revert after five years unless extended.
• Temporary deductions for tips, overtime, and car loan interest may offer targeted relief. Taxpayers can deduct up to $25,000 in tips and $12,500 in overtime pay, depending on income. Additionally, up to $10,000 in interest on car loans for U.S.-assembled vehicles is deductible—again subject to income limits. These provisions are temporary and phase down over time, making them more useful for short-term planning than long-range projections.
• Itemized deductions are now limited for top earners. Taxpayers in the highest bracket (37%) will see their itemized deduction benefit capped at 35%. This is a quiet but meaningful change that affects those with large deductions from mortgage interest, charitable contributions, or SALT. It may influence year-end giving strategies and the timing of major deductible expenses.

Key planning takeaway: While these provisions offer stability, many of the new deductions come with phaseouts and limitations that require careful coordination. Business owners will want to revisit compensation structures, retirement plan funding, and entity selection. Families in high-income brackets may find that once-reliable deductions are now less valuable. And for those in the middle, new opportunities to reduce income—temporarily or permanently—can unlock overlooked savings.

Healthcare: Tighter Eligibility, More HSAs, and Funding Shifts

The healthcare landscape under the Act becomes more stringent in eligibility but offers expanded tools for those in high-deductible plans.

• Medicaid eligibility will be reviewed more frequently. Starting in 2026, states must conduct eligibility redeterminations every six months and review federal death records quarterly. While this aims to reduce fraud, it could lead to unintended coverage losses for people with unstable incomes or complex paperwork.
• Work requirements are back for many Medicaid recipients. Able-bodied adults must verify each month that they are working, studying, volunteering, or otherwise engaged for at least 80 hours. Those under 19 and people facing certain short-term hardships are exempt, but the burden of documentation will likely fall on low-income enrollees with the fewest resources.
• Medicaid enrollees will face new cost-sharing rules. Starting in 2028, states must charge enrollees up to $35 for some medical visits or services, with a 5% income cap. These rules exclude primary care, mental health, and substance use treatment at qualified clinics, but even modest fees could deter access for low-income families.
• ACA subsidies will become harder to qualify for. Enhanced premium tax credits expire at the end of 2025, and eligibility will be subject to monthly income verification. Some categories of lawfully present immigrants will no longer qualify at all. These changes may increase premiums or reduce coverage for marketplace enrollees, particularly those who are self-employed or semi-retired.
• HSA eligibility expands to more people. The bill allows individuals with bronze or catastrophic ACA plans to contribute to a Health Savings Account. It also permits HSA funds to be used before meeting the deductible for things like telehealth and direct primary care, increasing flexibility for those managing routine care on a budget.
• Certain healthcare providers will lose federal funding. Organizations primarily focused on reproductive health and family planning—such as nonprofit clinics—will no longer be eligible for Medicaid reimbursement in most cases. Access to care in rural or underserved areas may be affected if these providers scale back or close.
• States expanding Medicaid after 2026 won’t get enhanced matching funds. The extra federal funding for states that expand coverage under the ACA will no longer be available after January 1, 2026. This change could reduce the incentive for remaining states to expand coverage.

Key planning takeaway: Families using ACA coverage should prepare for higher out-of-pocket costs and more frequent income checks. For those eligible for an HSA, the expanded rules offer a tax-smart way to manage both current and future healthcare needs.

Student Loans: Fewer Borrowing Options, More Guardrails

The Act delivers a major overhaul of federal student lending—replacing long-standing repayment programs, phasing out popular loan types, and imposing new caps. For families helping kids or grandkids with education, and for borrowers managing graduate or professional school debt, the financial aid playbook just changed significantly.

• Grad PLUS loans are being phased out. Beginning July 1, 2026, graduate and professional students will no longer be eligible for Direct PLUS Loans. These loans have traditionally served as a backstop for students who exhausted other aid—allowing them to fund advanced degrees with few limits. With this option gone, students will face much tighter borrowing constraints, and families may need to reconsider whether a graduate program is financially viable without private lending or out-of-pocket support.
• A new income-based Repayment Assistance Plan (RAP) will replace several existing repayment options. For new borrowers starting in 2026, RAP becomes the default alternative to the 10-year standard plan. It calculates payments based on adjusted gross income, requires a $10 monthly minimum, and offers loan forgiveness after 360 qualifying payments. Borrowers who don’t qualify for RAP may still access Income-Based Repayment (IBR), but the more flexible Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) plans will no longer be available for new loans.
• Annual and lifetime loan limits are being introduced. Graduate students will be capped at $20,500 per year and a lifetime maximum of $100,000—or $200,000 for those also pursuing professional degrees. Parent PLUS loans will be capped at $20,000 per dependent per year, with a $65,000 lifetime maximum. For many families, this will require more proactive planning to bridge funding gaps or to adjust educational expectations altogether.
• Forbearance and deferment rules are tightening. Starting in 2027, unemployment and economic hardship deferments will no longer apply to new loans. Forbearance will be limited to nine months within any two-year window. Borrowers with loans in default will have just two chances (instead of one) to rehabilitate their loans, but with a more rigid process and tighter oversight.
• New guardrails will hold schools accountable for graduate outcomes. Institutions offering programs with consistently low graduate earnings (relative to cost and credential level) may be barred from receiving federal student aid. If a program fails these tests for one year, it must warn students. Two years of failure leads to aid disqualification. This provision, while designed to protect borrowers, could limit access to certain programs—particularly in the arts or public service fields—if schools choose to discontinue offerings due to regulatory pressure.
• Changes to Pell Grants and FAFSA rules will affect aid eligibility. Pell recipients must now include foreign income in their FAFSA application, and students receiving non-federal grants that exceed the cost of attendance will be ineligible for Pell support. Beginning in 2026, family-owned farms and small businesses with under 100 employees will be excluded from the financial need calculation, which may help some middle-income families qualify for aid.

Key planning takeaway: Families and graduate students will face a stricter borrowing environment, with fewer levers to pull in emergencies. College planning will require deeper analysis of program costs, future earning potential, and how to use tools like 529 plans, custodial accounts, and private scholarships to fill the gaps. Borrowers already navigating repayment will need to prepare for eventual transitions to the new system—and make sure they aren’t caught off guard by expiring provisions or vanishing options.

Business Owners: Enhanced Deductions and R&D Write-Offs, But Tighter Interest Rules

For many small and midsize businesses, the tax code is now more favorable—but only if you’re positioned to benefit.

• Bonus depreciation is now permanent. This allows full expensing of qualified assets placed into service after January 2025. It’s especially valuable for capital-intensive businesses investing in machinery, vehicles, or technology upgrades.
• Domestic R&D expenses are now fully deductible again under Section 174. Small businesses with under $30 million in revenue may apply the change retroactively to post-2021 expenses, offering a chance to amend past returns or accelerate amortization.
• The 20% Qualified Business Income (QBI) deduction is made permanent. This deduction under Section 199A allows many owners of pass-through entities—like S corporations, partnerships, and sole proprietorships—to deduct up to 20% of their qualified income. While the deduction was previously set to expire in 2026, it’s now locked in. But keep in mind: income thresholds and wage/property tests still apply. For service-based businesses, especially those near the phaseout range, proper entity structuring and compensation planning remain critical.
• Interest expense limitations return beginning in 2025, using an EBITDA-based formula. This change could restrict deductions for highly leveraged companies or those with significant depreciation. Modeling cash flow and tax impact is key if your business relies on debt financing.

Key planning takeaway: Owners should review how income is reported, how payroll is structured, and whether their current business entity still makes sense under the updated rules.

Energy, Environment, and Opportunity Zones: Shifting Priorities

This portion of the bill represents a hard pivot away from climate-focused spending and toward traditional resource development and rural investment. It also breathes new life into Opportunity Zones with more rules and sharper targeting. For investors and planners, it’s a reshuffling of federal priorities—and a sign that the policy winds have changed.

• Most IRA-era clean energy funding is repealed. The legislation rescinds billions in tax credits, grants, and loan guarantees for solar, wind, electric vehicles, and energy efficiency programs. The Greenhouse Gas Reduction Fund, climate grants for local governments, and several Department of Energy funding initiatives are eliminated. This abrupt reversal may dampen near-term momentum in ESG-aligned sectors and remove some of the incentive-driven tailwinds renewable projects have relied on.
• Fossil fuel leasing and drilling receive new mandates and incentives. The Department of the Interior is required to resume quarterly oil and gas lease sales on public lands and in offshore regions, including Alaska and the Gulf of Mexico. The law restores noncompetitive leasing, reduces royalty rates for methane and coal, and rolls back many of the Inflation Reduction Act’s environmental restrictions. Revenue-sharing provisions heavily favor Alaska, with up to 70 percent of future income from certain lease areas returned to the state.
• Renewable projects on federal land face higher costs. Although wind and solar leases are still allowed, developers will pay new acreage rents and transmission access fees. A portion of those fees will be directed to the states and counties where projects are located, but the policy tone is less about promoting renewables and more about extracting financial return from them.
• The Opportunity Zone program is expanded—but with guardrails. A second wave of Opportunity Zones will be designated under stricter eligibility requirements. To qualify, census tracts must have a poverty rate of at least 20 percent or a median family income below 70 percent of the area median. Areas above 125 percent of the median are excluded. At least 33 percent of all newly designated OZs must be entirely rural. The bill also adds new reporting requirements, making it more difficult to fly under the radar but easier to demonstrate impact.

Key planning takeaway: The federal government is pulling back from subsidizing clean energy and putting traditional energy development front and center. Investors should reexamine sector allocations, especially in utilities, infrastructure, and energy. Meanwhile, Opportunity Zones may offer new tax deferral potential—but with more strings attached. Careful review of location, timing, and compliance will be essential for anyone considering OZ-based investment strategies.

Early Steps to Consider (This Is Where We’re Starting with Clients)

We’re still unpacking the long-term implications, but here are five key areas we’re evaluating with clients today:

1. Run a 2025–2026 tax projection.
   Many of the deductions and limitations begin next year. We’re modeling different scenarios based on client income levels, business structures, and investment income to identify potential benefits—or pitfalls.
2. Revisit HSA eligibility and contributions.
   If you now qualify under a bronze or catastrophic plan, we’ll help you open and fund an HSA before year-end. Contributions are tax-deductible, grow tax-deferred, and can be used tax-free for qualified medical expenses.
3. Review your investment strategy for sector shifts.
   With a rollback in renewable subsidies and a resurgence in oil, gas, and defense spending, some portfolios may need realignment. We’re not advocating wholesale changes, but sector exposure is worth reviewing.
4. Audit your college funding plan.
   With borrowing caps and reduced loan flexibility, families need to think differently. We’re helping clients compare cost-to-earnings ratios and align 529 withdrawals with revised aid formulas.
5. Coordinate with your estate and tax team.
   Provisions around Medicaid eligibility, health care affordability, and asset-based aid formulas could impact intergenerational planning. It’s a good time to align your advisor, attorney, and CPA.

Final Thought: Stay Proactive, Not Paralyzed

This is sweeping legislation, but it’s also just the start. Implementation will unfold over months, if not years, and there will be changes, delays, and litigation. That’s why we view this post as an early roadmap—not the final word.

The most effective response is not panic—it’s preparation.

We’re already meeting with clients to analyze how these provisions could impact their taxes, healthcare planning, and investment strategy. If you haven’t talked to your advisor recently, now’s the time.

Let’s have that conversation while there’s still room to maneuver.
Book a time to talk, and we’ll help make sense of what matters most for you.