After intense negotiations and a tied Senate vote, theOne Big Beautiful Billhas passed Congress and is expected to be signed by President Trump shortly. This sweeping legislation delivers on key policy priorities in taxes, energy, immigration, and health care—with significant implications for investors, businesses, and high-net-worth individuals.
Key Takeaways for Grafton Wealth Management Clients
Tax Policy & Personal Finance
- Trump-Era Tax Cuts Made Permanent: Provisions from the 2017 Tax Cuts and Jobs Act—including lower individual and corporate rates—are extended.
- New Deductions Introduced:
- No tax on tips or overtime(subject to income caps).
- Increased deduction for seniors: Additional $6,000 for those 65+ through 2028.
- Estate & Gift Tax Exemption:
- Increased from$10M to $15M(per individual) starting in 2026.
- SALT Cap Relief:
- Temporarily raised to$40,000(for households under $500K income) through 2029.
- Child Tax Credit: Raised to$2,200 in 2025, and now indexed to inflation.
- Pass-Through Income Deduction:
- 20% QBI deduction made permanentfor eligible businesses.
- R&D and Equipment Expensing:
- Immediate expensing for R&D and capital investments is made permanent, enhancing tax efficiency for growth-focused businesses.
Business & Investment Highlights
- Qualified Small Business Stock (Section 1202):
- Reformed to expand access to capital gains exclusions—a win for angel investors and startup founders.
- Bonus Depreciation Restored: 100% expensing for property investments resumes in 2025.
- Low-Income Housing Tax Credit (LIHTC):
- Increased to12%to spur affordable housing construction—potentially boosting real estate development opportunities.
Clean Energy Credit Rollbacks
- KeyBiden-era clean energy tax creditsare being phased out or repealed, including:
- EV tax credit ($7,500)
- Residential clean energy incentives
- Energy-efficient home and building credits
- Oil, gas, and coal sectors gainnew incentives, including expanded deductions and lease access on federal lands.
Healthcare & Medicaid Reforms
- Tightened eligibility for Medicaid: New work/education requirements estimated to remove ~4.8 million from the program.
- Cuts in federal reimbursement to states: Could strain local healthcare systems, especially in Medicaid-dependent areas.
- Rural Hospital Funding: $50B allocated to support rural hospitals, potentially stabilizing healthcare access in underserved regions.
Changes to SNAP & Social Safety Net
- SNAP (food stamps) eligibility tightened for older adults without dependents.
- States now bear more administrative and benefit costs, with increased oversight on spending accuracy.
USImmigration & Border Security Investments
- $131B for border security, including:
- $46.5B for wall construction and tech upgrades
- $45B for detention facilities
- Expanded ICE operations and new funding to support state-led border enforcement
Strategic Investments in Technology & Space
- AI Development Funding:
- $150M for National Labs to partner with private sector on AI initiatives.
- Spaceports Get Tax-Exempt Bond Access:
- A major step for clients in aerospace and infrastructure investing.
What This Means for You
This legislation presentsstrategic tax planning opportunities, particularly for:
- High-income individuals and familiesseeking to optimize deductions and estate strategies.
- Entrepreneurs and investorsin tech, energy, and early-stage companies.
- Real estate and infrastructure investors, especially in housing or space-related sectors.
We encourage clients to schedule a review with your Grafton advisor to explore how these changes may affect your2025-2026 financial strategy, estate planning, or investment allocations.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
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