Explore how the One Big Beautiful Bill may affect taxes, deductions, and credits now and in the years ahead.

On July 4, the One Big Beautiful Bill was signed into law at a White House ceremony. This domestic policy bill extends the 2017 tax cuts set to expire this year, making some of those rules permanent. The bill also creates several new tax laws for individuals while addressing other tax issues for businesses.1,2

It might be a good time to check with your tax, legal, or accounting professional about the changes in the law. Some will start this year, while other changes will kick in in 2026. Like previous tax laws, some new rules are scheduled to expire, while others are permanent. Here’s a look at changes expected to impact most tax filers shortly.

Taxes

One key feature of the One Big Beautiful Bill Act is the extension and revision of some of the tax laws that were part of the 2017 Tax Cuts and Jobs Act (TCJA). Here’s a quick summary of the three changes we found the most interesting:

Extension of Tax Rates

The bill extends the current tax rates of the 12 percent, 22 percent, 24 percent, 32 percent, and 37 percent brackets, respectively. Had the TCJA expired, the rates would have reverted to 15, 25, 28, 33, and 39.6 percent. The sixth tax bracket stayed the same at a 35 percent tax rate.1,2

Standard Deduction

It also increased the standard deduction to $15,750 for single filers and $31,500 for those filing jointly for 2025. Both are slightly rising from the current rate. Note: The standard deduction will adjust for inflation starting next year.1,2

State and Local Tax Deduction (SALT)

The SALT will increase to $40,000 in 2025 and will increase 1 percent annually until 2030. However, in 2030, it will revert to $10,000. Note: SALT has a $500,000 threshold for single and married filers.1,2

The “Bonus” Deduction

The new “bonus” deduction for older Americans has received much attention since the One Big Beautiful Bill Act became law on July 4. Here’s what’s changing for seniors with the new bill. Starting in 2025, the bill provides a $6,000 bonus deduction for filers 65 and up in addition to the standard deduction available to all taxpayers. The new rule will also affect unmarried/non-surviving spouses. The deduction begins to phase out for individuals with incomes starting at $75,000, or joint filers with an income of $150,000. It phases out completely for individuals earning more than $175,000 and couples earning $250,000. Note: The bonus deduction ends in 2028.1,2

Child Tax Credit

Starting in 2025, the child tax credit of $2,000 will increase to $2,200. The credit also has a COLA (cost-of-living adjustment) attached.1,2

Dependent Care

The bill, which will take effect in 2026, increases the dependent care flexible spending account limit from $5,000 to $7,500. It also raises the maximum percentage of qualified expenses for dependent care from 35 percent to 50 percent.1,2

American Family Account

The government will make a one-time $1,000 payment into an account for babies born between 2025 and 2028. Note: Parents can add up to $5,000/year. No withdrawals are allowed before age 18.1,2

529 Expansion

The bill extends the 529 umbrella to cover nontuition expenses related to elementary or secondary school attendance. In addition, starting in 2026, the cap for tuition-related expenses increases from $10,000 to $20,000.1,2

New Car Loans

Between 2025 and 2028, a $10,000 deduction on new car loan interest will be available, but some limitations will apply (such as the car needing to be brand-new). First, the deduction will be reduced if your gross income exceeds $100,000, or $200,000 if you are married. The car’s final assembly must occur in the U.S. to qualify for the deduction.1,2

Electric Vehicle (EV) Subsidies

Some home improvements (such as windows) and residential energy credits (adding solar) end after December 31, 2025. EV credits for new and used cars end after September 30, 2025.1,2

Small Business Deductions

The new law permanently establishes a deduction of up to 20 percent of qualified business income for sole proprietorships, partnerships, and S-corps.1,2

100 Percent Expensing of Capital and Factory Investments

The bill restores the provision that allows businesses to expense 100 percent of capital investments made on or after January 19, 2025. However, some limitations may apply.1,2

1099-K

The new law sets the reporting limits at $20,000 and 200 transactions for transactions on cash apps. Note: The rule starts in 2025. It rolls back the $600 threshold set in previous legislation.1,2

No Tax on Tips

A new $25,000 deduction for tips starting in 2025 and ending in 2028 is part of the new law. The deduction is reduced if your gross income exceeds $150,000, or $300,000 if you are married and filing jointly. Note: The tax on tips provision is allowed, even if you take the standard deduction.1,2

No Tax on Overtime

New overtime deductions were created, starting in 2025 and ending in 2028. These comprise a $12,500 deduction (single filers) and a $25,000 deduction (married filing jointly). Note: Like no tax on tips, the deduction reduces if your gross income exceeds $150,000, or $300,000 if married filing jointly.1,2

Charitable Contribution Recordkeeping

Charitable contributions of $1,000 for individual filers and $2,000 for married couples filing jointly are now deductible, even if you don’t itemize your deductions.1,2

Estate and Gift Tax Exemption

The bill increases the estate and gift tax exemption starting in 2026. This year, it is capped at $13.99 million for single filers and $27.98 million for married filing jointly. In 2026, it will increase to $15 million for single filers and $30 million for married filing jointly. Note: The exemption will increase with inflation.1,2

A Note on Estate Management

Ever since the Tax Cuts and Jobs Act of 2017, there has been an ongoing concern that the estate and gift tax exemption would revert to the 2017 level in 2025. Although the new bill extends the rule, it may change again sometime in the future. Often, the best approach to estate management is proactive.1,2

The new bill has added complexity to the tax code, so I anticipate the IRS will issue guidelines for interpreting the updated rules later this year. Please reach out if you have any questions, and I’ll pass along any information I might have. I would also encourage you to speak with your tax, legal, or accounting professional before making any adjustments based on tax updates in the One Big Beautiful Bill.

1. CNBC.com, July 3, 2025.
2. Congress.gov, August 21, 2025.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

This investment account question is vital and answered as early as possible.

Investment firms have a client service feature that may be a benefit to certain investors. They will ask you whether you would like to provide the name and information of a trusted contact.1

You do not have to supply this information, but it may offer some advantages. The request is made with your best interest in mind – and to lower the risk of someone attempting to make financial decisions on your behalf.1

Why is setting up a trusted contact so important? While no one wants to think ill of someone they know and love, the reality is that there is $3.4 billion worth of suspicious transactions a year related to elder financial exploitation, according to the Financial Crimes Enforcement Network.2

The trusted contact request is a response to this reality. The Financial Industry Regulatory Authority (FINRA) now requires that investment firms make reasonable efforts to acquire the name and contact info of a person you trust. This person is someone that investment firms can contact if they suspect the investor is making an “unusual financial decision” or appears to be suffering a notable cognitive decline.3

Investment firms may put a hold on disbursements of cash or securities from accounts if they suspect the withdrawals or transactions may involve financial exploitation. In such circumstances, they are asked to get in touch with the investor, the trusted contact, and other agencies, if necessary.3

Who should your trusted contact be? At first thought, the answer seems obvious: the person who you trust the most. Yes, that individual may be one of the best choices – but keep some factors in mind.

Ideally, your trusted contact is financially savvy, or at the very least, has some basic financial knowledge. You may trust your spouse, your sibling, or one of your children more than you trust anyone else, but how much does that person know about investing and financial matters?

You should have a high level of confidence that your trusted contact will behave ethically and respect your privacy. This person may be given confidential information about your investments.

It is encouraged that your family members know who your designated trusted contact is. That way, any family member who might be tempted to take advantage of you knows another family member is looking out with your best interest in mind, which may be an effective deterrent to elder financial abuse. It should be noted that the trusted contact may, optionally, be an attorney, a financial professional, or a CPA.3

Your trusted contact is your ally. If you are being exploited financially or could be at risk of such exploitation, that person will be alerted and called to action.

As the old saying goes, money never builds character, it only reveals it. The character of your trusted contact should not waver upon assuming this responsibility.

1. FINRA.org, 2023
2. FinCen.gov, 2023
3. FINRA.org, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Entrepreneurs all face the same question, “Which business structure should I adopt?”

According to the U.S. Census Bureau, there were over five million new business applications submitted in 2024 alone. All individuals pursuing the dream of exercising their entrepreneurial muscles will face the same question, “Which business structure should I adopt?”1

Each strategy presents its own set of pros and cons to consider. This overview is not intended as tax or legal advice and may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding the most appropriate business structure for your organization.

Sole Proprietorship/Partnership

This structure is the simplest. But it creates no separation from its owner. Income from the business is simply added to the individual’s personal tax return.2

Advantages: Easy to set up and simple to maintain.

Disadvantages: Owners are personally liable for the business’s financial obligations, thus, exposing their personal assets (house, savings, etc.). It does not offer the prestige or sense of permanence of a corporation or LLC.

C-Corporation

A C-corporation is a separate legal entity from its owners, making it easier to raise money, issue stock, and transfer ownership. Its life is perpetual and will survive the owner’s death.2

Advantages: There may be tax advantages, including more allowable business expenses. It protects owners from personal liability for the company’s financial obligations and may lend a measure of prestige and permanence.

Disadvantages: More expensive to set up, the paperwork and formality are greater than for a sole proprietorship or LLC. Income may be taxed twice, once at the corporate level and once when distributed to owners as dividend income.

S-Corporation

After forming a corporation, an owner may elect an “S-Corporation Status” by adopting a resolution to that effect and submitting Form 2553 to the IRS.2

The S-corporation is taxed like a sole proprietorship, i.e., the company’s income will pass through to shareholders and be reported on their respective personal tax returns.

Advantages: S-corporations avoid the double taxation issue associated with C-corporations, while enjoying many of the same tax advantages. Owners are shielded from personal liability for the company’s financial obligations. It provides the prestige of a corporation for small businesses.

Disadvantages: S-corporations do not have all the tax-deductible expenses of a C-corporation. The cost of set up, the paperwork, and formality are greater than for a sole proprietorship or LLC. S-corporations have certain restrictions, including a “100 or fewer” shareholders requirement. Shareholders must be U.S. citizens, and the business cannot be owned by another business.

Limited Liability Company

An LLC is a hybrid between a corporation and a sole proprietorship, offering easy management, pass-through taxation, and the liability protection of a corporation. Similar to a corporation, it is a separate legal entity, but there is no stock.2

Advantages: LLCs provide the protections of a corporation but are taxed similar to a sole proprietorship.

Disadvantages: Typically more expensive to form than a sole proprietorship, LLCs require more paperwork and formalized behavior.

Remember, the choice of business structure is not an irreversible decision. You may amend your business structure to accommodate your changing needs and circumstances.

1. Census.gov, 2025
2. IRS.gov, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Longer, healthier living can put greater stress on retirement assets; the bucket approach may be one answer.

 

John and Mary are nearing retirement and they have a lot of items on their bucket list. Longer life expectancies mean John and Mary may need to prepare for two or even three decades of retirement. How should they position their money?1

One approach is to segment your expenses into three buckets:

  • Basic Living Expenses— Food, Rent, Utilities, etc.
  • Discretionary Spending — Vacations, Dining Out, etc.
  • Legacy Assets — for heirs and charities

Next, pair appropriate investments to each bucket. For instance, Social Security might be assigned to the Basic Living Expenses bucket.2

For the discretionary spending bucket, you might consider investments that pay a steady dividend and that also offer the potential for growth.3

Finally, list the Legacy assets that you expect to pass on to your heirs and charities.

A bucket plan can help you be better prepared for a comfortable retirement.

Call today and we can develop a strategy that may help you put enough money in your buckets to complete all the items on your bucket list.

1. John and Mary are a hypothetical couple used for illustrative purposes only. Diversification is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline.
2. Social Security benefits may play a more limited role in the future and some financial professional recommend creating a retirement income strategy that excludes Social Security payments.
3. A company’s board of directors can stop, decrease or increase the dividend payout at any time. Investments offering a higher dividend may involve a higher degree of risk. Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. Shares, when sold, may be worth more or less than their original cost.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

This article will help blended families think and prepare their estate strategy.

Preparing your estate can be complicated, and if you’re a part of a blended family, estate decisions can be even more complex and nuanced. Blended families take on many forms but typically consist of couples with children from previous relationships. Here are a few case studies to help illustrate some of the challenges.

Case Study #1: Children From Previous Marriages

Simple wills often are structured to leave all assets to the surviving spouse. If your estate strategy relies on this type of will, you could risk overlooking children from previous marriages. Also, while it’s unsettling to consider, the surviving spouse can end up changing a will without proper measures put in place.1

When new children join a blended family, estate strategies can get even more complicated. But with a well-structured approach, you can direct how to distribute your assets.

Case Study #2: When One Partner Has Significantly More Assets

While the divorce rate has been trending lower, the number of remarriages (2nd or more marriages) has increased. One person entering into a new marriage may have more assets than their spouse, given that 40% of all new marriages are remarriages for one or both spouses. An estate strategy can help ensure that your assets pass down according to your wishes.2

Case Study #3: Traditional Trusts May Not Be Enough

In blended families, a traditional trust is a good start, but it may not go far enough. One possible solution is to create three trusts (one for each spouse, in addition to a joint trust) to help address different scenarios.3
Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional familiar with the rules and regulations.

Starting the Process

Blended families are pretty common these days. If you’re in that position, it’s important to remember that you can create an estate strategy to address your specific situation. The first step may be an estate document review.

1. Investopedia.com, April 30, 2023
2. Forbes.com, August 8, 2023
3. Investopedia.com, March 31, 2023
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

“I’m proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money.”
Entertainer Arthur Godfrey

The irrevocable life insurance trust (ILIT) can be an important estate strategy tool that may accomplish a number of estate objectives; however, it may not be appropriate for every individual.

Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.

Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

What Is an ILIT?

An ILIT is created by an individual (the grantor) during his or her lifetime. The ILIT owns a life insurance policy on the grantor’s life via the transfer of ownership of an existing policy or through the grantor’s annual contribution of cash to pay the premiums on a policy purchased by the trust.

The grantor designates beneficiaries, usually family members, who will typically receive the proceeds upon the death of the grantor.

The trust is irrevocable, meaning that the grantor forfeits all rights to the property contained in the trust. Its irrevocable nature is integral to accomplishing the ILIT’s objectives.

What Can an ILIT Accomplish?

The ILIT may be able to accomplish several estate objectives, including:

  1. Meeting liquidity needs;
  2. Managing estate taxation on the policy proceeds;
  3. Providing income to survivors.

How Does an ILIT Work?

When you die, the trust is designed to receive a payment equal to the policy coverage amount, e.g., $500,000. Since the trust’s ownership of the policy is irrevocable, the proceeds are not considered your property. Consequently, they do not fall into your estate, thus potentially avoiding estate taxation. (Remember, generally no income tax is due on such life insurance proceeds.)1

Keep in mind, this is a hypothetical example used for illustrative purposes only. It is not representative of any specific estate or estate strategy. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.

The trust provisions should be set up to provide direction about how and to whom payments may be made. You may direct that the trust pay out cash to cover certain expenses, e.g., funeral costs, probate, taxes, final medical expenses, and debts.

This may obviate the need to sell less liquid assets at an inopportune time to cover such costs.

The trust’s beneficiaries may receive the proceeds (after any payments are made to satisfy liquidity needs), creating an inheritance free of estate taxes.

Finally, creditors should not be able to attack these assets since they belong to the trust, not you.

Creating an ILIT should be done only with the assistance of a qualified estate planning attorney. It is a complicated exercise in which mistakes may result in losing the benefits ILITs offer.

1. Investopedia.com, January 5, 2023
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. CopyrightFMG Suite.
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