Podcast Summary: The 5 Things You NEED to Know About The One Big Beautiful Bill

Money Guy Show
Hosts: Brian Preston and Bo Hanson
Episode Title: The 5 Things You NEED to Know About The One Big Beautiful Bill
Release Date: July 25, 2025

Introduction to The One Big Beautiful Bill

In this episode, Brian Preston and Bo Hanson delve into the intricacies of The One Big Beautiful Bill, a significant piece of legislation signed into law on July 4, 2025. The hosts aim to demystify the bill's components, emphasizing how these changes impact everyday Americans' financial landscapes.

Key Quote:
Bo Hanson [00:41]: “We love helping folks decipher what policy changes mean for their money so that really they can focus on what matters most to them.”

1. Tax Rates, Deductions, and Credits

The hosts begin by unpacking the primary changes in the bill related to taxation, which affect nearly every taxpayer in the country.

a. Tax Rate Adjustments

Previously, tax rates were set to revert to pre-2017 levels. However, the new legislation locks in the current lower tax rates, altering the brackets as follows:

• Old Brackets: 10%, 15%, 25%, 28%, 33%, 35%, 39.6%
• New Brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37%

Notable Insight:
Brian Preston [02:06]: “What this tax bill did is it basically locked in the temporary and turned it into as permanent as things can be in Washington.”

b. Standard Deduction Enhancements

The standard deduction has been elevated and made permanent:

• New Standard Deductions:
  • Single Filers: $15,007.50
  • Married Filing Jointly: $31,500

Additionally, a temporary boost from 2025 to 2028 adds:

• Extra for Single Filers or Head of Household: $1,000
• Extra for Joint Filers: $2,000

Quote:
Brian Preston [03:46]: “With the standard deduction now being twice what it was under the 2016 tax laws, simplicity reigns as 90% of taxpayers continue to take the standard deduction.”

c. Additional Deductions for Seniors

Seniors receive an extra deduction to alleviate their tax burden:

• Additional Deduction:
  • Individuals 65 and older: $6,000
  • Married Couples: $12,000

Condition: This deduction phases out for those with an adjusted gross income (AGI) over $75,000 (individual) or $150,000 (married filing jointly).

Quote:
Brian Preston [04:12]: “This is going to provide some relief for seniors, although it is temporary.”

d. Child Tax Credit Expansion

The child tax credit sees an increase:

• New Credit Amount: $2,200 per qualifying child (up from $2,000)
• Components:
  • $1,500 refundable portion
  • $500 credit for other dependents

Impact: This change solidifies benefits for those in the "messy middle," ensuring they retain valuable tax credits.

Quote:
Bo Hanson [05:00]: “Because this is now just codifying or making it permanent, we get to keep a lot of you in the messy middle will get to keep that child tax credit.”

e. Charitable Contributions Adjustment

A new above-the-line deduction encourages charitable giving:

• Deduction Limits:
  • Individuals: $1,000
  • Married Couples: $2,000

Quote:
Brian Preston [05:39]: “Whether you itemize or you just take the standard deduction, this is making it above the line, which is a good thing from a generosity standpoint.”

f. Impact and Action Steps

These tax changes broadly affect all taxpayers, with notable benefits for those in mid-income brackets and seniors. The hosts emphasize the importance of:

• Reviewing applicable deductions and credits
• Monitoring income levels for phase-outs
• Considering hiring a tax professional to navigate these changes effectively

Quote:
Bo Hanson [07:08]: “For messy middle households... the permanent lower rates coupled with the higher standard deduction could result in tax savings on average somewhere around $500 to $2,000 per year.”

2. New Tax Deductions and Clarifications

Moving beyond basic tax adjustments, the bill introduces new deductions and clarifies existing policies.

a. Deductions for Tip and Overtime Income

• Tip Income Deduction: Up to $25,000 in qualified tip income is deductible from federal income taxes for those compensated through tips. This is temporary, lasting from 2025 to 2028, and subject to income phase-outs.
• Overtime Pay Deduction: Similar temporary deductions apply to overtime pay, allowing deductions up to $12,500 for singles or $25,000 for joint filers.

Quote:
Brian Preston [10:27]: “It’s not completely, they just basically came up with a deduction that up to $25,000 would be... not being taxable.”

b. State and Local Taxes (SALT) Deduction Increase

The SALT deduction cap is raised:

• New SALT Cap: $40,000 (up from $10,000)
• Eligibility: Adjusted gross income under $500,000

Quote:
Bo Hanson [12:31]: “If you lived in a high tax state, this raises the cap on your deductible taxes significantly.”

c. Clarifications on Social Security and Roth IRAs

The hosts address misconceptions:

• Social Security: While additional deductions benefit seniors, Social Security benefits remain taxable.
• Roth IRAs: Contrary to some reports, the legislation does not eliminate Roth or backdoor Roth IRA conversions.

Quote:
Brian Preston [13:23]: “This is not a true statement. There have been proposals, but this legislation did not happen.”

3. Education-Related Changes

The bill introduces significant changes to educational financial planning, impacting 529 plans and introducing new custodial accounts.

a. Enhancements to 529 Plans

• K-12 Contributions: Increased limit from $10,000 to $20,000 for primary education expenses.

Quote:
Brian Preston [18:35]: “These changes benefit those saving for primary education, making it a substantial addition to educational financial planning.”

b. Introduction of Trump Accounts

A new form of custodial savings accounts for children born between January 1, 2026, and December 31, 2028:

• Initial Government Contribution: $1,000 at birth
• Additional Contributions: Up to $5,000 annually after birth
• Investment: Likely in low-cost index funds (pending official clarification)

Quote:
Bo Hanson [19:06]: “If your child is born inside that window, there's a special account that's going to be open and they're going to be eligible and able to take advantage of.”

c. Student Loan Repayment and Borrowing Caps

Effective July 1, 2026, the bill imposes borrowing caps and alters repayment plans:

• Borrowing Caps:
  • Unsubsidized Graduate Loans: $20,500/year, $100,000 lifetime
  • Professional Degrees (e.g., Medical, Law): $50,000/year, $200,000 lifetime
  • Overall Federal Loan Lifetime Limit: $257,000 per student
• Repayment Plans: Elimination of certain plans and introduction of new options, with a mandatory switch by July 1, 2028

Quote:
Brian Preston [25:50]: “This is some pretty big changes... It’s interesting to see what this does to the cost of education.”

4. Additional Policy Changes

The legislation also addresses various specialized areas, including estate taxes, business deductions, and more.

a. Estate Tax Adjustments

• New Thresholds:
  • Individuals: $15 million
  • Married Couples: $30 million

Quote:
Brian Preston [31:24]: “If you are a high-income person and charitably minded, the new estate tax thresholds are significant.”

b. Qualified Business Interest (QBI) Deduction Permanent

The 20% QBI deduction for pass-through entities like S Corps and LLCs is now permanent, benefiting those in the gig and hustle economies.

Quote:
Brian Preston [33:54]: “If you are part of the hustle economy side, there's a good chance you might qualify for the QBI deduction.”

c. Temporary Auto Loan Interest Deduction

Deductible interest on auto loans for new U.S.-assembled vehicles:

• Deduction Limit: Up to $10,000
• Eligibility: AGI below $100,000 for singles or $200,000 for joint filers
• Duration: 2025 to 2028

Quote:
Bo Hanson [32:16]: “If you're below those thresholds, automobile interest on a car note will now be deductible at least for the next three years.”

5. Strategic Financial Planning in Light of the Bill

The hosts emphasize proactive financial planning to maximize benefits and mitigate potential drawbacks:

• For Taxpayers: Ensure all deductions and credits are utilized effectively, stay informed on phase-outs, and consider professional tax advice.
• For Families: Leverage enhanced 529 plans and consider the long-term benefits of Trump accounts.
• For Students and Borrowers: Navigate new student loan caps and repayment plans by exploring scholarships, grants, and affordable education pathways.

Notable Quote:
Brian Preston [27:54]: “If you are someone who does have student loans, you ought to do the work of figuring out whether to accelerate your payments or begin building up for when rates might increase in 2028.”

Honorable Mentions

The episode concludes with brief discussions on other specialized changes:

• Accelerated Depreciation: Benefits for business owners and real estate investors.
• Qualified Small Business Exclusion: Enhancements to support small businesses.

Final Quote:
Brian Preston [33:20]: “We want you to keep your financial life as simple as possible, but if you have more assets and complexities, we're here to help navigate those changes.”

Conclusion

Brian Preston and Bo Hanson provide a comprehensive overview of The One Big Beautiful Bill, breaking down its multifaceted impacts on taxes, education, and financial planning. By highlighting key changes and offering actionable advice, the hosts equip listeners with the knowledge needed to adapt and thrive under the new legislation.

Closing Statement:
Brian Preston: “We're here to help you navigate the complexities so you can focus on building your wealth and living a fulfilled life.”

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