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Copyright © 2019. Unifirst Financial. All Rights Reserved

www.unifirstlife.com     

Copyright © 2019. Unifirst Financial. All Rights Reserved

Big Beautiful Bill Tax Changes 2025: What They Mean for Your Taxes, Business, and Retirement

  • Writer: Vincent Anthony Abu
    Vincent Anthony Abu
  • Jul 22
  • 5 min read

Updated: Jul 27

Big Beautiful Bill Tax Changes 2025: What They Mean for Your Taxes, Business, and Retirement

Big Beautiful Bill Tax Changes 2025: What You Must Know

What Is the ‘Big Beautiful Bill’? On July 4, 2025, Congress passed H.R. 1, unofficially dubbed the “One Big Beautiful Bill Act” — a massive tax and spending bill backed by former President Donald Trump.


This isn’t just another tax tweak. It’s a fundamental reshaping of the U.S. tax code, federal safety net programs, and budget priorities for the next decade.


“It’s the most consequential tax bill since 2017,” said Erica York, senior economist at the Tax Foundation. “But the long-term fiscal effects are still unclear.” (Tax Foundation, July 2025)


UPDATE: Tax Law Status as of July 2025

The One Big Beautiful Bill Act has been passed and signed into law, and the IRS has confirmed several major provisions — including the tax exemption for overtime and tip income, the new $6,000 senior deduction, and the expanded $40,000 SALT cap.


While these changes are now part of federal law, we are still awaiting formal implementation guidance from the IRS, including how these provisions will be reported and applied on 2025 tax forms.


Stay up to date as guidance evolves. We will continue to monitor official IRS publications and provide timely updates to help you apply the new rules with clarity and confidence.



Major Tax Law Changes: The Big Beautiful Bill Tax Changes 2025, What They Mean for Your Taxes, Business, and Retirement


Personal Tax Rates Stay Lower

No changes to brackets — great news if you’re earning under $400K. Those TCJA cuts remain permanent.


0% Tax on Tips and Overtime

If you’re a nurse picking up extra shifts or an EMT working overtime, your additional income is now tax-free federally through 2028.


Child Tax Credit Bump

The Child Tax Credit is now $2,200, and indexed for inflation going forward.


Social Security Is Now Tax-Free

Thanks to a new $6,000 senior deduction, most retirees will no longer owe federal income tax on their benefits.


SALT Deduction: Temporarily Raised to $40,000

After years of frustration in high-tax states, the SALT (State and Local Tax) deduction cap has been temporarily raised:

  • 2025 SALT cap = $40,000

  • Phaseout starts at $500K AGI, reducing the deduction by 30% of the excess income

  • Reverts to $10,000 in 2030


Example: An NYPD officer earning $200K with $30K in property/state income tax can now deduct the full $30K, up from just $10K under old rules.

“This is a big win for New York taxpayers — but it’s a temporary one,” said Rep. Nicole Malliotakis (R-NY). – NY Post, July 2025

Small Business & Self-Employed Provisions


20% QBI Deduction

If you’re self-employed or run an LLC, you get a 20% deduction off net income.


100% Expensing Returns

Buy a truck, computer system, or office upgrade? Deduct it all upfront.


QSBS Overhaul

Startup founders and investors benefit from higher thresholds for tax-free stock sales — especially helpful in tech and healthcare.



Social Security & Senior Benefits

If you’re 65+, this law brings serious savings:

  • New $6,000 senior deduction

  • Social Security no longer taxed


If your only income is $28,000 from benefits and $10,000 from investments, you likely owe zero federal income tax.



Medicaid, SNAP & Health Changes

For FDNY, NYPD, Nurses, EMTs:

Supporting elderly parents on Medicaid? Expect tighter work requirements and more frequent eligibility reviews.

  • Adults 19–64 must work or volunteer

  • SNAP has expanded work rules for recipients with older children

  • States with errors >6% must repay part of SNAP cost


Clean-Energy Rollbacks

EV, Solar, and Wind Credits End Soon

  • New EV credits end Sept 2025

  • Used EVs by June 2026

  • Solar/wind phased out early

Wired Magazine noted that “green energy adoption will likely slow among middle-income families” following this rollback. (July 2025)

Book a tax credit review before the window closes.


Student Loans & Education Reform

  • Grad loans capped at $20.5K/year

  • Total limit = $100K–$200K depending on program

  • Grad PLUS eliminated

  • Forgiveness now takes 30 years


Parents should reevaluate 529 plan timing and available credits.


Border Security, Defense & Immigration

  • $150B to defense

  • $45B to ICE and immigration detention

  • $46.5B for border wall & AI surveillance

  • New annual asylum and visa fees


How This Affects Money Trends in 2025 & Beyond


The Future Tax Hike Trap

While this bill cuts taxes now, it adds over $4 trillion to the deficit by 2035, per the Congressional Budget Office.

“These policies create a long-term imbalance,” warns CBO Director Phillip Swagel. “At some point, taxes will need to rise to compensate.” – [CBO.gov, July 2025]

What You Should Do Now: Shift to Tax-Free Income

Big Beautiful Bill Tax Changes 2025: What They Mean for Your Taxes, Business, and Retirement. If future tax rates are likely to rise, then it makes sense to build income streams that are tax-free or tax-neutral.


Strategies to consider:

  • Roth conversions while rates are low

  • Cash Value Life Insurance for tax-free borrowing

  • Municipal bonds for state/federal tax-free income

  • Fixed Indexed Annuities (FIAs) for tax deferral + guaranteed income




UPDATE: Tax Law Status as of July 2025

The One Big Beautiful Bill Act has been signed into law, and the IRS has acknowledged several key provisions—such as the federal tax exemption for overtime and tip income, the new $6,000 senior deduction, and the temporary increase of the SALT deduction cap to $40,000.


While these changes are now part of federal tax law, the IRS has not yet released official implementation details. Further guidance is expected to clarify how these provisions will be reflected on 2025 tax forms and schedules.


Stay up to date as guidance evolves. We will continue to monitor official IRS publications and provide timely updates to help you apply the new rules with clarity and confidence.



What You Should Do Next

Every worker, entrepreneur, or retiree has something to gain — or lose — from this bill. The winners will be those who plan early and use the next few years wisely.


Let’s build your tax-smart 2025 plan now: PlanWithVince.com


Frequently Asked Questions

Is Social Security income really tax-free?

Yes — the $6,000 senior deduction removes most benefit taxation.


What happened to the SALT deduction?

Temporarily increased to $40,000 through 2029, with phaseouts starting at $500K AGI.


What’s the QBI deduction now?

23% of net income for qualifying small business owners.


What energy credits can I still claim?

Biofuels and rural renewables. EV and solar end by late 2025/2026.


Should I shift to Roth or Tax-Free Strategies?

Yes — if you expect future tax rates to rise (and they likely will), tax-free income matters more than ever.



Final Analysis: What This Bill Really Means

This bill offers powerful short-term relief — but it’s a double-edged sword:

  • Yes, you save more on taxes now

  • But the long-term fiscal imbalance all but guarantees higher future taxes


That’s why your 2025 tax strategy can’t just be about today’s rates. It has to prepare for tomorrow’s reality.


If you’re:

  • A small business owner

  • A high-earning W-2 employee

  • A retiree with IRA/401(k) assets

  • A public service worker caring for family


.…you need to diversify your income sources and shift toward tax-free growth before it’s too late. Ready to protect your future? Book your plan now at www.PlanWithVince.com



References

Tax Foundation – Erica York, July 2025Statement on the impact of H.R. 1 and tax policy direction. https://taxfoundation.org


Congressional Budget Office (CBO) – July 2025 Report. Projected fiscal effects of H.R. 1: $4 trillion added to the deficit by 2035. https://www.cbo.gov


Internal Revenue Service (IRS). Guidance on QBI (Section 199A) deduction, Child Tax Credit, and tax brackets. https://www.irs.gov


U.S. House of Representatives – H.R. 1 Bill Text. Full legislative language of the One Big Beautiful Bill Act. https://www.congress.gov


Social Security Administration (SSA). Policy updates on Social Security taxation and senior deductions. https://www.ssa.gov


New York Post – July 2025. Coverage of SALT deduction changes and local reactions. https://nypost.com


Wired Magazine – July 2025. Reporting on clean-energy rollback impacts and middle-income adoption decline. https://www.wired.com


U.S. Department of Education, Student loan cap updates and Grad PLUS program changes under H.R. 1. https://www.ed.gov

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About Vince A.

Vince is one of Unifirst Financial & Tax Consultants' licensed advisors with a proven track record for helping people and is an authority on personal finance. His experience and knowledge of taxation, life insurance, annuities, and proven financial strategies allows him to help affluent families protect their future, and develop a tax-advantaged retirement plan. 

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Disclosure: As licensed professionals we have a responsibility to our principal, clients, as well as the public. Unifirst Financial Advisors & Tax Consultants may receive compensation from the providers whose products we recommend. Before any recommendations are made, prospective consumers are qualified according to federal and state regulations. To protect the public, NYS DFS has enacted the suitability and best interest in life insurance and annuity transactions (Reg. 187), Unifirst Financial Advisors & Tax Consultants strictly adhere to these standards as well as other Federal, State, and Local Laws.

Financial products, strategies and other offerings presented on our website, social media pages, and other links are meant to educate and illustrate hypothetical situations. We urge you to seek advice from a licensed professional before making any decisions that could impact your interest. The concepts presented does not consider your personal objectives, risk tolerance, or possible tax implications.

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