The Fourth of July didn’t just bring fireworks this year—it delivered a tax revolution that could change the game for millions of Americans.

But new laws can be confusing—even overwhelming.

So instead of listing dry rules and percentages, let’s follow the Harris family—a fictional but realistic example of how this new law might change things for everyday Americans.

By the end, you’ll see exactly what’s in the One Big Beautiful Bill Act (OBBBA) and what it could mean for you.

Meet the Harris Family

• Lisa (38): Restaurant server working late shifts to cover rent and childcare
• Tom (42): Self-employed handyman running his own small business
• Maya (7) and Noah (3): Their two energetic kids
• Grandma Ellen (67): Lives with them on a modest retirement income

They’re not wealthy. Not struggling. Just hardworking, planning ahead, and trying to make the most of every dollar.

This week, they sat down with a hypothetical tax advisor to sort out what the new law might mean for them. Here’s what they discussed.

Lower Tax Brackets Locked In

Lisa and Tom had worried for years about future tax hikes.

Their advisor explained that the lower individual income tax brackets from the 2017 TCJA are now permanent, along with the doubled standard deduction ($15,000 single / $30,000 joint in 2025).

For them, this offered something priceless: predictability.

They realized they could plan Roth IRA conversions over the next five years without fearing a sudden tax rate spike.

Their advisor put it simply: stable rates make long-term planning easier.

Practical Tip:
Consider a multi-year strategy for Roth conversions, retirement withdrawals, or large capital gains now that rates are locked in.

New Deductions for Service Workers

Lisa was amazed to learn she’d be eligible for a new tip income deduction of up to $25,000 (2025–2028).

As a server working double shifts, she always had to report her tips—without any special break.

The advisor warned her, though: she’d need excellent records. The deduction is designed for workers like her, but the IRS will want proof.

They also discussed the new overtime income deduction and a car loan interest deduction (up to $10,000) for U.S.-assembled vehicles.

For Lisa, the biggest win was knowing she could save thousands just by carefully tracking her tips.

Practical Tip:
If you earn tips or work overtime, start recording every shift meticulously. To qualify for the car loan interest deduction, make sure to check your car’s assembly details before buying.

The Car Dilemma for Tom’s Business

Tom had been eyeing a replacement for his old work truck.

Their advisor pointed out the new deduction on car loan interest—but only for U.S.-assembled vehicles.

That detail mattered.

He did his homework, chose a qualifying U.S.-built pickup, and locked in the savings.

Their advisor’s advice was straightforward: buying American can pay off, but verify your vehicle’s eligibility first.

Practical Tip:
Check the VIN and manufacturer details to ensure your vehicle qualifies for the deduction.

Helping Grandma with the Extra Senior Deduction

Grandma Ellen lives with the family on Social Security and a small pension.

Their advisor told her about the new $6,000 bonus standard deduction for seniors 65 and older (available 2025–2028).

It meant she could lower her taxable income enough to avoid pushing some of her Social Security benefits into the taxable range.

This was especially important since millions of retirees could benefit from this new rule in the coming years.

Practical Tip:
If you’re 65+, time pension or IRA withdrawals to stay under phase-out thresholds and maximize the new deduction.

Raising Kids with the Bigger Child Tax Credit

Lisa and Tom smiled when they heard the Child Tax Credit was rising to $2,200 per qualifying child.

With Maya and Noah, that meant $4,400 total—$600 more than before.

They knew that extra money would help with everything from school supplies to new shoes.

Their advisor reminded them to double-check all Social Security Numbers on their tax forms to avoid refund delays.

Practical Tip:
Confirm the Social Security details for all dependents well before filing.

Planning for the Future with Trump Accounts

When the advisor mentioned “Trump Accounts,” Lisa and Tom were curious.

These new accounts allow contributions of up to $5,000 per year for kids under 8, with tax-advantaged growth for education, first homes, or even starting a business.

Plus, there’s a $1,000 government “baby bonus” for children born between 2024 and 2029.

For them, this was a chance to start building real savings for their kids’ futures.

The advisor’s message was clear: the earlier you start, the more those savings grow.

Practical Tip:
If you have young children or grandchildren, set these accounts up as early as possible.

Relief from the SALT Cap

Living in Maryland, Tom and Lisa pay significant property and state income taxes.

Previously capped at $10,000, the SALT deduction will now jump to $40,000 in 2025, with 1% annual increases until 2029 before reverting in 2030.

That change meant they could finally deduct nearly all of what they pay in state and local taxes—thousands of dollars back in their budget.

Their advisor suggested they consider prepaying property or estimated state taxes in higher-income years before the cap resets.

Practical Tip:
If you’re in a high-tax state, plan ahead to maximize this window of higher deductions.

Making Giving Easier

Grandma Ellen has always given monthly to her local food bank, but she’s never itemized deductions.

The advisor shared that starting in 2026, non-itemizers can claim an above-the-line charitable deduction of up to $2,000 (joint filers).

For Ellen, that meant she’d finally get a tax benefit for something she was already doing.

This new rule is designed to make charitable giving accessible for more people—no matter how they file.

Practical Tip:
Talk with your advisor about structuring your annual giving to fit the new deduction limits.

Tom’s Business Gets a Boost

As a self-employed handyman, Tom’s eyes lit up when he heard the details:

• The 20% pass-through deduction is now permanent.
• 100% bonus depreciation is permanent.
• Section 179 expensing limits increased.
• Full expensing for domestic R&D costs.
• Section 1202 stock exclusion limit increased.

For Tom, this meant he could buy new tools or even a van and write off the entire cost in the first year, helping his cash flow and planning.

Their advisor encouraged him to schedule time to review big purchases so he could take full advantage.

Practical Tip:
Small business owners should work with their CPAs to time large purchases for maximum tax savings.

What Should You Do Right Now?

The Harris family left their meeting with a clear plan—and you can, too.

• Review if you qualify for new deductions, especially for tips, overtime, or kids.
• Plan Roth conversions or capital gains sales now that rates are predictable.
• Verify your vehicle qualifies for new loan interest deductions.
• Help seniors in your family claim the new deduction.
• Consider opening Trump Accounts for young children.
• Rethink your strategy for SALT deductions before the cap resets.
• Plan charitable giving with the new above-the-line deduction.
• Align your business investments with the new permanent incentives.

Frequently Asked Questions

What is the One Big Beautiful Bill Act?

A 2025 U.S. tax law that locks in lower tax rates, creates new deductions for workers and seniors, and expands small business incentives.

When do the new deductions start?

Most begin in 2025, with some like the charitable above-the-line deduction starting in 2026.

How long does the SALT cap increase last?

The higher cap runs through 2029 before reverting to $10,000 in 2030.

Who qualifies for the tip income deduction?

Service workers with traditionally reported tip income—like servers, bartenders, and salon workers.

What can Trump Accounts be used for?

Education costs, first home purchases, or starting a business for children under 8.

Ready to Make a Plan?

The One Big Beautiful Bill Act offers real opportunities—but only if you know how to use them.

As Benjamin Franklin wisely said, “Failing to plan is planning to fail.”

Don’t leave money on the table. Don’t risk paying more than you should.

We’re here to help you turn confusion into strategy—and save you thousands in the years ahead.

Ready to take control of your tax plan? Book your strategy session today.