The Big Beautiful Bill Part Two: Individual Planning Opportunities Under the New 2025 Tax Law

The “One Big Beautiful Bill Act” is now law, introducing significant and impactful tax changes that will affect individuals and businesses nationwide. In our first blog, we broke down the big-picture implications: what’s changing and why it matters. Now, in Part Two, we’ll focus on individual planning opportunities.

While the law is designed to simplify taxes and deliver new benefits, the reality is that many of these provisions are temporary, phasing out as early as 2028. That means the next few years will be critical for individuals and families who want to maximize deductions, credits, and savings strategies before the window closes.

In this post, we’ll highlight seven key areas where proactive planning can make a big difference. Along the way, we’ll share practical tips for how to capture these new opportunities and avoid common pitfalls.

(This is Part Two of a two-part series to highlight changes coming from the One Big Beautiful Bill Act. Read Part One here.)

Seniors (65+): Don’t Miss the Extra Standard Deduction

One of the most widely discussed provisions of the new law is the expanded deduction for seniors. If you’re 65 or older, you now qualify for an additional $6,000 standard deduction (or $12,000 for married couples filing jointly).

This is on top of the regular standard deduction everyone is entitled to, making it one of the most meaningful changes for retirees living on fixed incomes.

Planning tips:

This enhanced standard deduction for seniors can provide a major boost but only if you stay under the income limits.

• Know your MAGI: The $6,000 (single) or $12,000 (joint) bonus deduction begins to phase out once your modified adjusted gross income hits $75,000 (single) or $150,000 (joint). Even a few dollars over can reduce the benefit.
• Roth conversions? Investment sales? If you’re planning to convert a traditional IRA to a Roth or sell appreciated assets, consider spreading these actions over multiple years or delaying them until after you claim the enhanced deduction. Work with one of our tax advisors to run the numbers.

Use timing to your advantage: Income from Social Security, pensions, required minimum distributions (RMDs), and other sources can all affect your MAGI. If you’re close to the threshold, consider postponing elective income into the following year (or accelerating deductible expenses into the current year) to keep yourself below the limit. 

New Above-the-Line Deductions: Small Changes, Big Impact

The law introduces new above-the-line deductions, meaning you can take them even if you don’t itemize. 

• Auto Loan Interest: Deduct up to $10,000/year on qualifying loans for new vehicles assembled in the U.S. (purchased 2025–2028). This deduction phases out above $100,000 income ($200,000 joint).
• Overtime Pay: Deduct the “half-time” portion of federally required overtime pay, up to $12,500 single or $25,000 joint, with a phaseout limit of $150,000 for single filers, and $300,000 for married joint filers.
• Tipped Income: Workers in restaurants, salons, hospitality, and even gig workers like rideshare drivers can deduct tips reported to the IRS, up to $25,000, with a phaseout limit of $150,000 for single filers, and $300,000 for married joint filers. (Tips added for large parties that are not voluntary will be excluded.) Tips for Specified Service Trades or Businesses (SSTBs) are also not eligible. Of note, there has been some uncertainty about whether digital tips from platforms like Twitch or YouTube streaming will qualify for the deduction. As of this writing, the IRS is soliciting comments to help define the occupations that qualify, and CJBS is closely monitoring developments.

Planning tip:

• For auto loan interest, keep a copy of your loan agreement, purchase documents showing the vehicle’s assembly location (must be U.S.-assembled), and statements showing annual interest paid. Monitor your modified adjusted gross income (MAGI), since the deduction phases out above $100K single / $200K joint.
• For tipped workers (like servers, stylists, and gig workers), be diligent about reporting all tips to the IRS. Use a logbook or tip-tracking app to document daily tips. Employers must include these in your reported income for you to deduct them so accuracy and consistency matter.
• For overtime earners, request a breakdown of your overtime wages on your pay stubs or year-end earnings summary. Confirm with HR or payroll that your “half-time” portion of federally mandated overtime is clearly tracked and classified. This is what qualifies for the deduction, not the full overtime amount.

Charitable Giving: A Shift in Strategy

SALT Cap Relief: Temporary but Significant

The state and local tax (SALT) deduction cap has been a pain point for taxpayers in high-tax states since 2017. The new law raises the cap from $10,000 to $40,000 (2025–2029) for single filers and those married filing jointly. The $30,000 increase is subject to a phaseout for single and MFJ filing taxpayers when their MAGI is $500,000. The full benefit is eliminated when their MAGI reaches $600,000. The cap is $20,000 for those married filing separate with a phaseout at $250,000.

While this is welcome relief, it’s also temporary. After 2029, the cap is scheduled to revert unless further legislation is passed.

Planning tips:

• Business owners: Explore PTET elections: Many states now allow Pass-Through Entity Tax (PTET) elections, which let partnerships and S corporations pay state income tax at the entity level which will result in a federal deduction that bypasses the individual SALT cap entirely. This can be a powerful planning tool to preserve deductions beyond the $40,000 limit.
• Front-load where possible: If you anticipate a large state or local tax bill (especially property taxes), consider prepaying some of those obligations in early 2025 or consolidating known expenses into one tax year to fully utilize the higher cap while it lasts.
• Coordinate with other deductions: If you’re near the threshold for itemizing deductions, combining SALT payments with mortgage interest, charitable contributions, or medical expenses in the same year could push you over the limit and boost your tax benefit.

Families: Child Credits and New Savings Vehicles

Parents will see modest but meaningful enhancements.

• Parents of children born between 2025 and 2028 can access $1,000 government-funded savings accounts designed to help families start building long-term wealth from day one.
• The Child Tax Credit rises to $2,200 per child, with future inflation adjustments.

Planning tips:

• Open savings accounts as soon as eligible: For children born between 2025 and 2028, the government will provide $1,000 starter savings accounts. These are designed to grow over time—so the earlier you activate and contribute to them, the more you benefit from compound interest. Don’t wait to set them up.
• Pair the Child Tax Credit with 529 plans: The increased Child Tax Credit ($2,200 per child) can be used to help fund a 529 college savings plan, allowing you to grow education savings tax-free. Even modest, recurring contributions—paired with the government’s initial $1,000 boost—can accumulate significantly over 18 years.
• Think beyond college: If higher education isn’t the goal, some states offer flexible 529 plan options or alternate custodial accounts (like UGMA/UTMA) that can be used for other life expenses while still offering tax advantages.

Retirement Strategy: Roth Conversions and Annuities

Perhaps the biggest window of opportunity lies in retirement planning. With lower tax rates locked in (for now) and new deductions available, Roth IRA conversions are especially attractive between 2025 and 2028.

Converting traditional IRA assets to Roth now means paying tax at today’s rates, avoiding potentially higher taxes later, and ensuring tax-free withdrawals in retirement.

In addition, retirees may want to explore annuities—such as Qualified Longevity Annuity Contracts (QLACs)—to manage taxable income and stay under deduction phaseouts.

Planning tips:

• Strategically time Roth conversions: Converting traditional IRA assets to a Roth IRA allows future growth and withdrawals to be tax-free but you’ll owe income tax in the year you convert. To avoid accidentally triggering deduction phaseouts (like the expanded senior deduction or SALT cap benefits), plan conversions in manageable increments over multiple years.
• Use tax brackets to your advantage: If you’re in a lower tax bracket now but expect higher income or rates in the future (due to RMDs or sunset provisions), it’s often smart to “fill up” your current bracket with Roth conversions so you can maximize efficiency without pushing into higher marginal rates.
• Consider QLACs to manage future income: For retirees, Qualified Longevity Annuity Contracts (QLACs) can delay a portion of required minimum distributions (RMDs) past age 73. This helps control taxable income and maintain eligibility for deductions tied to MAGI thresholds.

Before acting, work with one of our tax advisors to model out multiple years. A carefully sequenced plan can lock in major long-term savings without disrupting current tax benefits.

Estate Planning: Higher Exemption Limits

Beginning in 2026, the estate tax exemption rises to $15 million (single) or $30 million (married), indexed for inflation.

For families concerned about wealth transfer and succession planning, this is a golden opportunity. These exemptions allow more assets to pass tax-free to heirs, but they may not last beyond this legislative cycle.

Planning tips:

• Start planning now: These elevated exemptions may only be available for a limited time, depending on future legislation. Waiting until the law sunsets or changes again could limit your options, especially for high-net-worth families with complex assets.
• Update core documents: Review and revise your wills, trusts, and beneficiary designations to reflect your current wishes and take full advantage of the higher exemption limits. This includes strategies like spousal lifetime access trusts (SLATs), grantor retained annuity trusts (GRATs), or irrevocable life insurance trusts (ILITs) if appropriate.
• Consider lifetime gifting: Gifting assets now while the exemption is high can remove future appreciation from your taxable estate. Work with your advisors to explore annual exclusion gifts, family limited partnerships, or direct tuition and medical payments that don’t count against your lifetime exemption.

Pulling It All Together

The 2025 tax law is packed with provisions that affect every corner of personal finance whether you’re a retiree living on savings, a parent raising kids, or a professional earning overtime and tips. But the opportunities come with strings attached: income thresholds, phaseouts, and expiration dates.

Here are three steps we recommend for individuals and families:

1. Map your income carefully. Many of the new deductions phase out at specific MAGI levels. Knowing where you stand today—and projecting future income—will help you maximize every dollar.
2. Time your moves. Whether it’s a Roth conversion, charitable gift, or prepayment of taxes, the timing matters. Acting within the next three years could deliver significantly more value than waiting.
3. Review your plan annually. Tax rules may shift again before 2028. Treat this as a living plan, not a one-time checklist.

Final Thoughts

The One Big Beautiful Bill has created a unique planning window. For some taxpayers, this means additional cash in your pocket each year. For others, it means once-in-a-lifetime opportunities to reposition retirement accounts, reduce estate taxes, and build savings for the next generation.

At CJBS, we’re committed to helping you navigate these changes with confidence. If you’d like a personalized review of how the new law affects your situation—or if you’re ready to put these strategies into action—our team is here to help.