'Big, Beautiful Bill' Tax Cuts YOU Need to Know About

The "Big Beautiful Bill" includes several tax cuts and changes, with a focus on making the 2017 Tax Cuts and Jobs Act (TCJA) permanent and expanding certain deductions. Key provisions include: making the individual income tax cuts of the TCJA permanent, increasing the standard deduction, and boosting the child tax credit. The bill also temporarily increases the SALT deduction cap and introduces tax breaks for seniors, overtime pay, and car loans. 

Here's a more detailed breakdown:

Permanent Changes:

• Tax Cuts and Jobs Act (TCJA):
• The bill makes the individual income tax cuts and bracket changes from the 2017 TCJA permanent, preventing a large tax increase for many taxpayers, according to the Tax Foundation. 
• Standard Deduction:
• The bill makes the increased standard deduction permanent. 
• Child Tax Credit:
• It locks in and boosts the doubled child tax credit to $2,200 for more than 40 million families, according to House Ways and Means (.gov). 
• SALT Deduction:
• The bill raises the cap on the state and local tax (SALT) deduction from $10,000 to $40,000 for five years, then it would revert to $10,000. 

Temporary Changes:

• Tax Breaks for Seniors:
• The bill includes a temporary tax break of $6,000 for seniors, phasing down as income increases. 
• Tax on Tips and Overtime:
• It provides tax relief for tips and overtime pay, with details on the specific income levels and phase-out thresholds varying. 
• Auto Loan Interest:
• Taxpayers can deduct interest paid on auto loans for US-made vehicles, with limits and phase-outs based on income and purchase price. 
• Senior Deduction:
• The bill introduces a temporary $6,000 deduction for seniors earning no more than $75,000 annually. 
• Qualified Business Income (QBI) Deduction:
• The bill includes a permanent extension of the 199A QBI deduction for small businesses. 

Other Provisions:

• Increased Standard Deduction:
• The bill increases the standard deduction for joint filers to $26,000, $19,500 for head of household filers, and $13,000 for all other filers. 
• Expanded Uses for 529 Plans:
• It expands the use of 529 savings plans to include things like testing fees, tutoring, and educational therapies for students with disabilities. 
• Health Savings Accounts (HSAs):
• The bill expands the use of HSAs to include gym memberships and fitness reimbursement, and allows for catch-up contributions for married couples filing jointly. 
• Charitable Contributions:
• The bill includes a permanent $1,000 above-the-line deduction for charitable contributions (or $2,000 for joint filers). 

Potential Impact:

• Increased Paychecks:
• The bill is projected to deliver bigger paychecks for many families, with some estimates showing a $10,000 boost annually for some families. 
• Wealthy Households:
• Higher-income households, particularly those in high-tax states, would benefit significantly from the expanded SALT deduction and the permanent reduction in the estate tax. 
• Taxpayer Equity:
• Some critics argue that the bill favors certain groups, like the wealthy and seniors, over others, like those with lower incomes, due to its various tax breaks and deductions.