What the “One Big Beautiful Bill” Means for Your Wallet—And Why It’s Not All Sunshine

Let’s talk about the bill with the boldest name in Washington: the “One Big Beautiful Bill.” Catchy? Absolutely. But what really matters is how this sweeping piece of legislation—passed by the House on May 22, 2025—might affect your personal finances.

Spoiler: It depends. On your income, your job, your family, even your ZIP code.

So let’s break it down like we would if you were sitting across from us in the office, coffee in hand, asking: “Okay, how does this actually affect me?”

The Good News (Depending on Who You Are)

Lower Taxes Might Stick Around

Remember the tax cuts from 2017’s TCJA? They were set to expire in 2025, but the OBBB would make them permanent. If you’re a middle- or high-income earner, this could reduce your tax liability. A family in the 22% tax bracket might avoid sliding into a higher one. That’s real money—potentially less going to the IRS, more staying in your pocket, depending on your individual tax situation.

New Tax Breaks That Sound Like a Dream

Here’s what’s temporarily on the table through 2028 (assuming no changes in the Senate version):

• No Tax on Tips: If you work in hospitality and pull in $5,000 in tips, you could save about $1,100 in taxes—depending on how your income is reported.

• No Tax on Overtime: An extra $8,000 in OT might save you up to $1,760 a year, assuming you're in the 22% bracket.

• Auto Loan Interest Deduction: If you financed a new, American-made car, you may be able to deduct the interest. It’s not life-changing, but it can add up—especially if you just bought something shiny.

• Child Tax Credit Bump: The credit increases to $2,500 per child. That’s $500 more per kid, which can help with daycare, dance class, or just catching up on back-to-school expenses.

SALT Cap Goes Up

State and Local Tax (SALT) deductions used to be capped at $10,000. Now? It’s up to $30,000, though it begins to phase out for high earners. If you live in a high-tax state like New York or California, this could translate into thousands more in deductions—depending on your filing status and income.

Tax Perks for Seniors

The standard deduction for those 65+ goes up by $4,000. That’s roughly $880 in tax savings if you're in the 22% bracket. It’s not the full Social Security tax repeal some had hoped for—but it’s a step.

Baby Bonds (aka “MAGA Accounts”)

Some policy circles are calling them “MAGA Accounts” (that’s the nickname, not an endorsement). These federally funded savings accounts would apply to kids born from 2024–2028. It’s a baby bond idea—seed money that could go toward education or home buying. The concept is promising, but the fine print? Still TBD.

The Not-So-Great News (Brace Yourself)

Cuts to Social Programs

This is where it gets complicated. The bill proposes significant cuts to programs many families rely on:

• Medicaid: New work requirements and eligibility changes could push an estimated 7 million people off the rolls by 2034. If you’re caring for a parent on Medicaid, this might mean increased out-of-pocket healthcare costs.

• SNAP: Grocery bills could rise for low-income households, making food insecurity more widespread.

• Other Subsidies: Programs supporting housing, energy assistance, and early education all face reductions—which could lead to higher living costs for those already juggling a lot.

Potential for a Wider Wealth Gap

Several analysts suggest that most of the significant financial benefits go to the top 0.1%. Middle-income families may see modest gains—some tax relief, possibly—but also more responsibility for things like elder care and rising costs. In some cases, the math doesn’t quite balance out.

Deficit Concerns

Depending on how you run the numbers, this bill could add between $2.5 and $5.3 trillion to the national deficit over the next decade. That raises the potential for higher interest rates or future tax hikes. Translation: mortgage, credit card, or student loan rates could increase.

ACA Access May Get Tougher

Shorter enrollment windows and stricter eligibility rules might leave close to 2 million more Americans uninsured. If you rely on ACA subsidies, this could mean shopping around for a new plan—or preparing for higher premiums.

Say Goodbye to Solar Incentives

Thinking about going solar? This bill phases out credits for individual households, while leaving corporate credits untouched. That could make installing rooftop solar systems more expensive for everyday homeowners.

The Mixed Bag: Gig Workers and Small Biz Owners

• Fewer Reporting Headaches: The $600 threshold for third-party reporting (like PayPal or Venmo) is getting rolled back. That means fewer 1099s. Less paperwork is nice—but it might make tax prep murkier if income isn’t clearly reported.

• Bigger QBI Deduction: Pass-through businesses may deduct up to 23% of qualified income (up from 20%). That’s great for higher earners. For smaller operators? It's more “eh” than “excellent.”

Let’s Put It in Real Terms

Say you’re a household earning $100,000. You’ve got two kids, one parent who works overtime, and an aging parent on Medicaid.

Potential Savings:

• Overtime exemption: ~$1,760 (depending on bracket)

• Child tax credit bump: $1,000

• Auto loan deduction: ~$300

• Estimated Total: ~$3,060

Potential Added Costs:

• Medicaid cuts: $2,000–$5,000

• Subsidy reductions: $500–$1,000

• Estimated Total: ~$2,500–$6,000

Your bottom line? You might come out $60 ahead—or $3,000 in the red. It really depends on how the pieces fall in your unique situation.

What Should You Do?

Here’s our best advice—keeping in mind that nothing here should be taken as individualized financial advice:

In the Short Term:

• Consider adjusting your withholding if you're eligible for new exemptions (like tips or OT).

• Don’t rush to spend any expected tax savings—use them to build up your emergency fund instead.

In the Long Term:

• Start thinking ahead to 2028, when many of these provisions are set to expire.

• Stay informed—this bill still needs to pass the Senate, and things will change.

• Keep an eye on interest rates. If you're thinking of refinancing or borrowing, it might be wise to act sooner rather than later—depending on your broader financial plan.

The Bottom Line?

None of this is one-size-fits-all. And that’s exactly why we don’t do cookie-cutter advice.

At Halter Ferguson Financial, we build every plan around you—your income, your goals, your values, and your life. Because that’s what real financial planning looks like.

Let’s Talk

Curious how the OBBB might affect your financial picture? We’d love to help you think it through.

Whether it’s navigating tax changes, planning your next big move, or just getting more confident about your options—we’re here.

Call us or schedule a visit. We’ll bring the strategy. You bring the questions.