Could You Pay Less Tax Under Trump’s One Big Beautiful Bill?

July 7, 2025

Well, here we are. Trump’s “One Big Beautiful Bill” is now the law of the land.

I have to admit—just a couple years ago, I’d have bet this was more political rally talk than a real piece of legislation. But Congress actually passed it, and it’s… big. And kind of beautiful, depending on who you ask.

So the question on everyone’s mind:

Could you pay less tax under this new law?

Short answer: Yes, many people will. But there’s plenty of nuance.

Let’s unpack what’s in this new tax code, who’s saving money, who might not, and how this could reshape your financial life—whether you’re a business owner, a physician, an investor, or just a regular taxpayer trying to make sense of all this.

By the way, if you’re someone juggling high state income taxes, business ventures, or planning for retirement, the ripple effects of this new bill could also intersect with areas like high state income taxes and retirement planning or even quirky topics like tax deductions for doctors’ business vacations.

What Exactly Is “One Big Beautiful Bill”?

The “One Big Beautiful Bill” (now officially H.R. 1, 119th Congress) is essentially a sequel to the 2017 Tax Cuts and Jobs Act (TCJA). It does two big things:

  1. Prevents the “TCJA cliff.” The TCJA’s lower tax rates and bigger standard deduction were set to expire after 2025. This new law makes those cuts permanent.

  2. Adds new tax breaks. Think higher child tax credits, new deductions for tips and overtime, and higher estate tax exemptions.

Trump’s team pitched it as tax relief for the middle class and business growth. Critics say it’s tilted toward higher earners and adds trillions to the deficit. Both statements are, well… kind of true.

Want to read legislative language? It’s all laid out on Congress.gov. But fair warning—it’s over 700 pages.

Has the Bill Passed Into Law?

Yes. President Trump signed it into law on July 4, 2025.

Most provisions kick in on January 1, 2026. So this year—2025—is your planning window.

Which Tax Brackets Are Changing?

Good news if you liked the TCJA rates:

  • The seven brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) stay permanent.

  • The top rate remains 37%—it didn’t drop to 33% as some early rumors suggested.

  • Brackets are slightly wider due to new inflation adjustments. So more of your income stays taxed at lower rates.

No sudden spikes back to pre-2018 rates. If you’re curious where your income falls, IRS Tax Tips has the current brackets (though they’ll be outdated soon).

Will Middle-Class Taxpayers Pay Less?

Yes, for most folks.

Here’s why:

  • The standard deduction jumps again in 2026:

    • Single filers: $15,750

    • Married joint: $31,500

  • Bracket widening keeps more income taxed at lower rates.

  • The child tax credit grows to $2,200 per child, permanently.

The Tax Foundation estimates middle-income families will save about $600–$2,000 per year compared to pre-TCJA law.

But… the biggest dollar savings still go to higher earners. That’s just math—if you make more, a percentage cut saves you more dollars.

What About Capital Gains?

One of the more interesting quirks: capital gains rates didn’t change.

  • Long-term gains still taxed at 0%, 15%, or 20%.

  • No new indexing for inflation.

Some new rules sweeten certain investments—for instance, the Qualified Small Business Stock (QSBS) gain exclusion jumps to 75% or even 100% for new investments held 4–5 years.

But if you’re a regular investor? Capital gains rules remain the same.

That said, tax loss harvesting strategies still matter. Here’s a good read on market losses and tax-saving opportunities if you’re trying to offset gains.

How Does This Impact Small Business Owners?

This law has plenty of goodies for business owners:

  • QBI deduction stays at 20% permanently. Earlier talk of raising it to 23% didn’t make it into the final bill.

  • Corporate tax rate remains 21%. Despite rumors of dropping it lower.

  • Bonus depreciation restored to 100% permanently. Great news for equipment purchases.

  • Simplified accounting thresholds go way up—for instance, more businesses can use cash accounting.

If you’re self-employed, these changes could mean thousands in savings. Check out this 1099 contractor tax guide for strategies under the current system.

Did Itemized Deductions Change?

Sort of.

  • The SALT cap increases from $10,000 to $40,000 starting in 2026—but drops back to $10,000 in 2030. So that’s temporary relief for high-tax-state folks.

  • Miscellaneous deductions (like unreimbursed work expenses) remain suspended.

  • Mortgage interest limits stay at $750,000 of debt.

So if you live in a high-tax state? This temporary bump might be a small win—but it’s not a full repeal. If this matters for you, you might also explore high state income taxes and retirement planning to minimize your burden.

Is the SALT Cap Gone?

Nope.

It’s simply higher for a few years—$40,000 instead of $10,000—but it returns to $10,000 after 2029 unless Congress acts again.

What About Corporate Taxes?

Despite speculation, the corporate tax rate stays at 21%.

Earlier drafts aimed for 18% or even 15%, but lawmakers scrapped those to avoid a larger deficit.

Instead, the big win for businesses is permanent 100% bonus depreciation. That’s huge if you’re buying new equipment, vehicles, or even certain nonresidential buildings in manufacturing and similar sectors.

Did the Standard Deduction Increase?

Yes. Starting in 2026:

  • Single filers: $15,750

  • Married joint: $31,500

That’s higher than the TCJA doubled deduction, and it’s indexed for inflation going forward.

Is This Mostly a Tax Cut for the Wealthy?

Depends how you measure it.

  • Yes, dollar-wise. High earners save the most in raw dollars.

  • No, percentage-wise. Middle-class households still get a cut—just smaller amounts.

Plus, higher estate tax exemptions help wealthier families.

Is the Estate Tax Gone?

Not entirely.

But the exemption leaps from ~$13 million to $15 million per person in 2026, indexed for inflation. For most Americans, this effectively wipes out estate tax concerns.

If you’re planning your legacy, things like private insurance structures or captive insurance might be even more relevant now for advanced wealth planning.

What About Child Tax Credits?

Good news for families:

  • The Child Tax Credit rises to $2,200 per child permanently.

  • The income thresholds stay high ($200,000 single, $400,000 married joint) before it phases out.

This saves many families a chunk of money each year.

Does This Raise the Deficit?

Yes.

Estimates peg it at $3–5 trillion over a decade. Proponents argue growth will offset the cost. Critics… not so much.

How Does This Affect Self-Employed Folks?

If you’re self-employed:

  • Lower individual rates stay locked in.

  • The QBI deduction lives on permanently.

  • Bonus depreciation means you can write off big purchases fast.

And if you’ve got side gigs, there’s even more potential savings. Here’s some insight on how physicians boost income with non-clinical side businesses—it’s a great example of how tax planning intersects with business strategy.

Any Changes to Retirement Accounts?

Surprisingly few.

  • No big Roth vs. traditional rule changes.

  • Contribution limits inch up a bit due to inflation.

  • No new caps on 401(k) contributions.

But lower tax rates might shift your Roth conversion math. For high earners, that’s a conversation worth having with an advisor. If you’re a physician or high-income professional, doctor tax-saving strategies could look different under the new brackets.

What About Healthcare Tax Credits?

No significant changes.

ACA subsidies and penalties remain untouched in this bill.

However, some business owners are exploring alternatives like self-insurance as healthcare costs continue to rise.

When Do These Changes Start?

Most provisions take effect January 1, 2026.

So your 2025 taxes are filed under current law. But this is the perfect year to plan ahead.

Should You Change Your Tax Planning Now?

Absolutely—but carefully.

Nothing’s retroactive yet, so you’ve got time to strategize. Smart moves might include:

  • Shifting income if you’re expecting lower rates.

  • Timing big capital purchases for bonus depreciation.

  • Reevaluating estate plans under the new exemptions.

Here’s where a tax advisor is worth their weight in gold. They’ll run the numbers, map scenarios, and help you avoid costly mistakes. Whether you’re a doctor considering the best tax structure for physicians or a business owner navigating bonus depreciation, planning beats guessing every time.

Tax Planning, Tax Savings, and Why Advisors Matter

Here’s the thing: taxes rarely get simpler. Even when politicians swear they’re “simplifying the code,” we usually end up with new wrinkles.

Tax planning now means:

  • Knowing your bracket and how it’s shifting.

  • Timing income and deductions wisely.

  • Reassessing your business structure under new rules.

  • Planning estate strategies before exemptions potentially change again.

Tax advisors help translate 700 pages of legislation into real-life strategies. They can help you keep more of your money—legally and safely.

Whether you’re a physician, business owner, or just someone trying to make sense of your finances, proactive tax planning could mean thousands of dollars saved. Or at the very least… fewer headaches come April.

FAQ

Has “One Big Beautiful Bill” actually passed?

Yes—it was signed into law on July 4, 2025.

Will my taxes go down?

Probably, especially if you’re middle-income. But high earners see the largest dollar savings.

Is the estate tax gone?

No, but the exemption is now $15 million per person starting in 2026.

Should I sell investments now?

No rush—but talk to an advisor. Capital gains rates didn’t change, but new planning opportunities might exist.

Are health insurance credits changing?

Not under this law. ACA subsidies remain in place.

How can a tax advisor help me?

They’ll help you understand the new rules, run personalized tax projections, and identify ways to reduce your bill legally.

Whether you’re thrilled or skeptical, the One Big Beautiful Bill is here—and it’s reshaping tax planning for millions. The sooner you start preparing, the better your odds of keeping more of your hard-earned money.

Ready to talk strategy? Start here.

Visit contact physiciantaxsolutions.com to schedule a consultation and learn how we can help you take control of your tax strategy today.

This post serves solely for informational purposes and should not be construed as legal, business, or tax advice. Individuals should seek guidance from their attorney, business advisor, or tax advisor regarding the matters discussed herein. physiciantaxsolutions.com assumes no responsibility for actions taken based on the information provided in this post.

 

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