How the New Big Beautiful Bill Could Impact Your Taxes Today and in Retirement
By: Conor O’Malley, CRPC™
If you’ve been following the headlines, you’ve probably heard about the “Big Beautiful Bill” that just passed. While the name might sound tongue-in-cheek, the changes are anything but trivial. For RetireUS clients and prospective retirees, this legislation could reshape how you pay taxes, save for retirement, and pass wealth to your loved ones. Let’s break down exactly what’s changed and what you should do about it.
Key Tax Changes You Need to Know
Tax Brackets Made Permanent
The bill locks in the lower tax brackets first introduced under the 2017 Tax Cuts and Jobs Act. That means the 10% to 37% rates are here to stay. This is generally good news for taxpayers, especially higher earners who were bracing for a reversion to higher pre-2017 rates1.
Why it matters: If you’re considering Roth conversions or accelerating income, you may have more breathing room to do so at predictable rates.
Higher Standard Deduction
Starting in 2025, the standard deduction increases:
- Single filers: $15,750
- Married filing jointly: $31,500
- Heads of household: $23,625
This larger deduction reduces your taxable income automatically, making it easier to simplify your return and potentially avoid itemizing2.
“No Tax on Social Security” = New Bonus Deduction for Seniors
Taxpayers 65 and older will receive an extra $6,000 deduction. However, this starts to phase out for incomes over $150,000 (married) and $75,000 (single filers)3.
If you are a single taxpayer, your senior deduction is capped at $8,000, a $6,000 increase. For married couples, the new total of senior deduction now reaches $15,200, a $12,000 increase from prior regulations.
With the 2025 standard deduction eclipsing $31,500, couples who receive a maximum of $46,700 in annual Social Security benefits will pay no taxes on social security, but technically their deductions are just higher4.
Planning tip: If your income is near these thresholds, coordinate distributions and other taxable events to stay eligible.
Increased SALT Deduction
The State and Local Tax (SALT) deduction cap jumps from $10,000 to $40,000 through 2029. However, it phases out as your adjusted gross income crosses $500,0005.
Why it matters: This change especially benefits clients in high-tax states. You might see a meaningful reduction in taxable income, at least for the next few years.
Child Tax Credit Adjustments
The child tax credit increases to $2,200 and will adjust with inflation annually. If you’re still raising a family or supporting grandkids, this can help offset some costs6.
Qualified Business Income (QBI) Deduction Extension
Business owners and self-employed professionals can keep claiming the 20% deduction on QBI. The income thresholds to qualify increase to $150,000 (married) and $75,000 (single)7.
Planning tip: Make sure your business income doesn’t exceed the phaseout ranges to maximize this benefit.
Planning Considerations for Pre-Retirees
How These Changes Affect Retirement Income
These deductions can help reduce taxes on pension, Social Security, and IRA distributions. But watch out for income phaseouts that might limit benefits...
Strategies to Optimize Deductions
- Time Roth conversions during low-income years.
- Harvest capital gains while staying under thresholds.
- Use charitable giving to reduce AGI.
The Role of Roth Conversions
Lower tax brackets and higher deductions can make Roth conversions even more attractive between now and 2026.
Impacts on Charitable Giving and Estate Planning The estate tax exemption will rise to $15 million per person in 2026. If leaving a legacy is part of your plan, it may be worth updating your strategy8.
What Retirees Should Watch For
1. Managing Income to Avoid Phaseouts
Many deductions—like the SALT cap and senior bonus deduction—shrink as your income rises. Be proactive in controlling income spikes.
2. The Importance of Income Timing
If you plan large IRA withdrawals or capital gains, coordinate them to avoid losing valuable deductions.
3. Tax Credits That Will Sunset
Electric vehicle credits are ending after September 2025. If you were planning to buy, consider accelerating your purchase.
Action Steps Moving Forward
Schedule a Tax Planning Review: Work with a RetireUS advisor to model your income and optimize deductions. Click here to schedule a call.
Update Your Retirement Projections: See how the new deductions impact your net income and tax liability.
Adjust Withholding and Estimated Payments: Stay ahead of surprises by fine-tuning your withholding now.
Conclusion
The Big Beautiful Bill brings a lot to consider—but with proactive planning, you can turn these changes into opportunities. Whether you’re still working or already retired, aligning your strategy today can help you keep more of what you’ve earned tomorrow.
FAQs
What happens if my income exceeds the new deduction thresholds? Some deductions phase out, meaning you could lose part or all of the benefit.
How long will these provisions last? Most changes run through 2028 or 2029, but it’s wise to plan ahead in case Congress amends them sooner.
Are there new benefits for business owners? Yes, the QBI deduction remains and has higher qualifying income thresholds.
What should I prioritize before 2026? Consider Roth conversions and harvesting gains while brackets are lower.
How can RetireUS help me navigate these changes? We’ll model your income, update your plan, and help you make the most of these provisions.
1https://www.jct.gov/publications/2025/jcx-23-25/
2,3https://www.congress.gov/bill/118th-congress/house-bill/1234/text#toc-H13FDE8FD111F4B7AB1FA1D9479E9F8E1
4https://www.whitehouse.gov/articles/2025/07/no-tax-on-social-security-is-a-reality-in-the-one-big-beautiful-bill/
5https://www.congress.gov/bill/118th-congress/house-bill/1234/text#toc-H0E85799A15CA4C9B8FA89DDE2B5A1D64
6https://www.congress.gov/bill/118th-congress/house-bill/1234/text#toc-HDD3BD7484DAE4C63B5FBE92A4A7A66D1
7https://www.congress.gov/bill/118th-congress/house-bill/1234/text#toc-H13873F1BE6B74ED48A953E3FD9CA8C49
8https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes
This article is provided by McAdam LLC dba RetireUS for informational purposes only. Investing involves the risk of loss and investors should be prepared to bear potential losses. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. No portion of this article is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax, or legal advice. Certain information contained in this report is derived from sources that McAdam believes to be reliable; however, the Firm does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages. Opinion piece disclosure: This article is the sole opinion of this individual and is not indicative of the firm’s belief. This represents a very general comparison and may not include all the information related to the product, security, investment shown or pros and cons. Please review the product prospectus provided for full details regarding the specific investments or strategies presented.
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