What the “One Big Beautiful Bill” Means for Your Taxes and Investments

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 In this episode, George Jameson, CFP® and founder of Capital Wealth Group in Columbia, SC, breaks down the newly signed “One Big Beautiful Bill” and what it means for your taxes, investments, and retirement plan. From permanent tax cuts to rising deficits, George shares key takeaways and practical planning tips for investors and retirees. 

 Welcome to "The Retirement Guide" Podcast! I'm your host George Jameson, owner of Capital Wealth Group, a Fee Only Advisory firm. Whether you’re nearing retirement or already retired, Join me each week as we explore the world of retirement planning and equip you with the knowledge and tools you need for a successful retirement.

Thank you for tuning in to this episode of The Retirement Guide. If you enjoyed this episode, please subscribe & leave a review. If you'd like a free 30-minute retirement review, visit our website at www.capitalwealthplan.com to schedule.

This is for education only.It is not tax, legal, or investment advice. Before  acting on any information consult your tax, legal, or investment advisor.

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Episode Transcript

George Jameson (00:00):
Hi, I'm George Jameson.
A certified financial plannerand founder of Capital Wealth
Group.
Glad you're here Today I want tobreak down the new tax and
spending bill that was signedinto law on July 4th.
It's officially called the OneBig Beautiful Bill and it makes
some pretty big changes to ourtax code and federal budget.

(00:20):
Now I know tax policy probablyisn't something you're reading
about every day, but this billhas some real implications for
investors.
Retirees, business owners, andjust about anyone who files a
tax return.
So let's dig in to what's in thebill, what it means for your
financial plan, and how to thinkabout it from an investing and

(00:43):
retirement planning perspective.
So why does it matter?
Let's start with the bigpicture.
Back in 2017, Congress passedthe Tax Cuts and Jobs Act that
gave us lower tax rates, biggerstandard deductions, and several
other changes, but most of thosewere set to expire at the end of

(01:04):
2025.
That's what people have beencalling the tax cliff.
If Congress didn't act, we weregoing to see a pretty big tax
increase starting next year.
This new bill makes a lot ofthose provisions permanent.
So whether you're retired, stillworking or running a small

(01:25):
business or just gettingstarted.
This removes a lot ofuncertainty around future tax
rates.
So let's look at the key taxchanges for individuals and
families.
Here are the main things toknow.
First, the current tax bracketsare now permanent, so those 10%,

(01:46):
12%, 22%, and so on, those arestaying in place unless, of
course a future Congress changesthem.
Next, the standard deduction isgoing up for single filers.
Now$15,750.

(02:07):
And for those married couples,it's$31,500, and this starts in
2025.
And then third, there's a newsenior bonus deduction.
It is$6,000 extra if you're overage 65 and make under$75,000.

(02:27):
That one phases out as yourincome increases and then goes
away after 2028.
And then fourth, The child taxcredit is going up slightly from
$2,000 to 2200, and moreimportantly, it's now indexed to
inflation, so it shouldgradually rise over time.

(02:49):
And then fifth, the alternativeminimum tax, also called a MT,
which used to catch some highearners by surprise has been
adjusted and now made permanentwith higher exemption
thresholds.
So bottom line, this locks in alower tax environment for
individuals for the foreseeablefuture.

(03:12):
Now let's look at some otherchanges in the bill that may or
may not affect you.
Number one, the salt deduction.
One big change.
A lot of people in higher taxstates will notice is the salt
deduction cap.
It's been$10,000 since 2017,which is how much you could

(03:33):
deduct for state and localtaxes.
That cap just went up to$40,000and it'll increase slightly each
year through 2029 beforedropping back down again.
There's also a new deduction fortip income.
If you earn less than$150,000and work in a tipped job, like a

(03:57):
waiter or waitress, you candeduct up to 25,000 in tips each
year through 2028.
That's a pretty niche change,but it could make a difference
for service workers.
Now on the flip side, some greenenergy tax credits are being
rolled back, especially forelectric vehicles and home

(04:18):
energy upgrades.
So if you're banking on thosefor a new electric car or some
renovations, just be aware thatsome of those incentives are
going away.
Now let's talk about estateplanning.
The estate tax exemption wasscheduled to get cut in half
next year.
This new bill prevents that.
It makes the higher exemptionlevels permanent.

(04:41):
So 15 million per person or 30million per couple, starting in
2026.
Even if you're not near thatlevel, which most of us aren't,
this still matters.
Having that clarity makes iteasier to plan, and it's a
reminder that estate planningisn't just for the ultra

(05:01):
wealthy.
Everyone needs a plan for howassets will be passed on.
Also, remember, states can havetheir own estate or inheritance
taxes with much lower exemptionamounts.
So depending on where you live,this could still be a factor.
And now for business owners,there are a few things worth

(05:22):
noting.
Number one, the section 1 79deduction.
That's the one that lets youwrite off vehicles, equipment,
and business purchases.
Right away, this has beendoubled.
You can now expense up to 2.5million in qualifying purchases.
And the second thing worthnoting for business owners is

(05:42):
the 20% pass through deductionfor S Corps, LLCs, and other
qualified businesses is nowpermanent.
And then third, tax credits fordomestic r and d and
manufacturing are stickingaround.
So if you own a small businessor are self-employed, these

(06:03):
changes may reduce your tax billand improve your ability to
invest in your company.
Now let's look at how we'repaying for this.
Now all of this sounds great,lower taxes, bigger deductions,
but of course it has to be paidfor somehow.
The bill includes about 1.2trillion in spending cuts,
mostly from programs likeMedicaid and nutrition

(06:26):
assistance.
Now, I'm not here to debatewhether this is good or bad, I'm
just stating the facts.
It also raises the debt ceilingby 5 trillion.
Which means that government cankeep borrowing without another
big fight in Congress, at leastfor a while.
So the Congressional BudgetOffice estimates that the bill

(06:46):
will add about three to 4trillion to the national debt
over the next 10 years.
That's on top of the 36 trillionwe already owe.
So this does raise long-termquestions about how we manage
this debt, how much interestwe'll be paying, and whether
future tax hikes or spendingcuts will be needed down the

(07:10):
road.
Alright, so what does all ofthis mean?
If you're an investor or you'replanning for retirement.
First, from a planningstandpoint, you now have more
certainty.
We don't have to worry about taxrates suddenly jumping next
year.
That makes it easier to makedecisions about things like Roth

(07:30):
conversions, when to drawincome, what accounts to start
drawing from first, or how tostructure your portfolio in a
tax efficient way.
And then second, interest ratesand inflation.
More borrowing could push rateshigher over time, which affects
bonds, mortgages, and even stockvaluations.

(07:52):
However this may or may not cometo fruition.
You'll want to keep an eye onduration on your bond portfolio
and stay diversified acrossasset classes, of course.
And third, I'm not here to tellyou how to invest or give you
any investment advice, but smalland midsize domestic businesses

(08:12):
may benefit from the bill.
Financials, may benefit due tolower corporate taxes.
Sectors like defense andinfrastructure may benefit.
While clean energy companiescould face some headwinds
without those tax credits.
And finally, for high net worthfamilies, this is a good time to

(08:32):
revisit estate strategies andmake use of the higher
exemption.
So wrapping it up.
So here's the bottom line.
This bill locks in a lot of thetax breaks we've had since 2017,
adds a few new ones and avoidsthe tax cliff that was coming
next year.
That's very good news forplanning, but it also increases

(08:55):
the debt, cuts back on some keyprograms and creates challenges
down the line.
From a financial planningperspective, now is the time to
update your income plan, reviewyour tax strategies, and double
check your estate documents.
These changes give us moreclarity, but planning still
matters.

(09:17):
That's it for today.
If you have any questions abouthow this affects your situation,
feel free to reach out and ifyou found this episode helpful
or any others, I'd appreciate itif you'd subscribe and share it
with a friend.
Thanks for listening.
I'm George Jameson.
I'll talk to you next week.
Have a great day.