At KMH Financial, we know that large bills like President Trump’s “One Big Beautiful Bill Act” (OBBBA) can feel overwhelming, especially considering that it weighed in at over 870 pages. So, we want to highlight what it could mean for you and your family at different stages of life.
Young Adults & New Workers (Ages 18–30)
Filing taxes should get simpler, with a higher standard deduction: $15,750 if single and $31,500 for married couples. New deductions are available through 2028, including up to $12,500 for overtime pay and up to $25,000 for tips. If you finance a U.S.-assembled car, you may deduct up to $10,000 in loan interest. These changes could help young workers keep more of their paycheck.
Families & Mid-Career Professionals (Ages 30–55)
For parents, the child tax credit rises to $2,200 per child, with $1,700 refundable. Families in high-tax states will see relief with the SALT (state and local tax) deduction cap increasing from $10,000 to $40,000, though it phases down for higher incomes. Beginning in 2026, even if you take the standard deduction, you’ll be able to deduct up to $1,000 (single) or $2,000 (married) in charitable contributions. This provides more flexibility for families balancing savings, expenses, and giving.
Seniors & Pre-Retirees (Ages 55+)
If you’re 65 or older, you’ll receive an additional $6,000 per person in deductions from 2025 through 2028. Healthcare planning also gets a boost, with new rules allowing unused FSA or HRA balances to roll into HSAs, and more flexibility in deducting medical expenses. These changes aim to ease the burden of rising healthcare costs in retirement.
Estate Planning for Everyone
The estate, gift, and generation-skipping tax exemption will rise to $15 million per person—or $30 million for married couples—starting in 2026, and it will adjust with inflation. This creates opportunities to pass on more wealth tax-free and makes long-term planning clearer.
Bottom line: Ensure that you check with your tax professional on everything that could affect you. Whether you’re starting out, raising a family, preparing for retirement, or planning your legacy, it’s a good time to revisit your financial plan to take advantage of these new opportunities.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.