The 2025 tax legislation is here, and it’s time to get strategic.

President Trump’s latest tax reform, formally titled the 2025 Tax Relief and Economic Growth Act and commonly known as “The Big Beautiful Bill,” serves as a continuation and extension  of the 2017 Tax Cuts and Jobs Act. The bill combines permanent tax cuts with new deductions, spending changes, and program rollbacks that will affect how you plan your finances for years to come.

What’s Actually in the Bill?

At its core, the bill retains tax benefits that have been in use since 2017 while introducing new opportunities. Major changes include permanent lower individual tax brackets, a fixed larger standard deduction, and 20% pass-through deduction for small businesses.

The bill also introduces targeted deductions for seniors, tips, overtime pay, and car loan interest. “Trump Accounts” have now been introduced for children born between 2025 and 2028 to help with education or a first home purchase.

On the spending side, it rolls back clean-energy incentives, cuts funding for Medicaid and SNAP, and increases spending on defence, border security, and rural hospitals, making it as much a broad policy package as a tax plan.

“The parts of the bill that will likely hit clients the hardest are the ones that change their everyday tax planning,” explains Silva Chamichyan, a tax partner at Grobstein Teeple. “For most clients, the biggest impacts will come from the lower tax brackets and larger standard deduction becoming permanent, giving individuals and families more certainty in their planning.”

For Business Owners: Stability and New Opportunities

Corporate Rates Stay Put

Good news for corporations: the 21% corporate tax rate from 2017 is now effectively permanent, removing major uncertainty that complicated business planning regarding rate jumps.

Pass-Through Entities Win Big

The 20% pass-through deduction for S-corporations, LLCs, and partnerships is now permanent. This means qualifying business owners can continue deducting 20% of their business income year after year, providing substantial ongoing tax savings.

For example, a business owner with a $500,000 S-corp profit can now count on saving approximately $20,000 annually through this deduction, assuming they qualify under the income and wage base limitations.

Enhanced Interest Deductions

A technical change that could have big impacts: the bill increases the cap on deductible business interest expense through changes to how adjusted taxable income (ATI) is calculated. Starting with tax years beginning after 2024, ATI is computed without taking into account deductions for depreciation, amortization, or depletion. This allows corporations to take higher interest expense deductions that would otherwise be limited.

Capital Investment Incentives Continue

The bill maintains favorable depreciation rules that encourage business investment. Businesses can still deduct 100% of the cost of qualifying equipment and certain property in the year it’s placed in service through bonus depreciation, and Section 179 expense limits remain high. The bill also keeps qualified improvement property eligible for accelerated depreciation.

“The bill keeps capital investment incentives strong, encouraging businesses to make equipment and property purchases sooner rather than later to lock in the biggest deductions,” Silva notes.

Need help optimizing your business structure or equipment purchase timing? Our tax and business advisory teams can help you maximize these opportunities.

For Individuals: More Deductions, More Planning Options

New Targeted Deductions

The bill introduces several new deductions that could benefit different types of workers and families:

• Tips and overtime pay: New deductions that will particularly help service industry workers
• Car loan interest: Provides relief for families financing vehicles
• Additional senior deduction: Extra tax breaks for older taxpayers beyond standard age-based increases
• Trump Accounts: Special accounts for children born between 2025 and 2028 that can be used for education or first home purchases

Estate Planning Gets Supercharged

For high-net-worth individuals, the changes to estate and gift taxes are significant. The exemption is permanently increased to $15 million per person, with annual adjustments for inflation. This effectively doubles the previous exemption amount, providing substantially more room for wealth transfer strategies without federal transfer taxes.

The generation-skipping transfer (GST) tax exemption also increases to $15 million, opening up new multigenerational planning opportunities.

QSBS Rules Change

The qualified small business stock (QSBS) gain exclusion rules are modified to provide a tiered gain exclusion for QSBS acquired after July 4, 2025. The new approach offers partial gain exclusion for shorter holding periods than the previous five-year requirement.

Practical Advice for Different Situations

For Middle-Class Families

Silva recommends that middle-class taxpayers review their withholdings and estimated tax payments to align with the new rates, deductions, and credits. Ensure you’re not overpaying or facing unexpected tax balances.

Families with children should adjust their planning to take full advantage of expanded child and dependent credits. Homeowners in high-tax states should reevaluate whether itemizing makes more sense now.

Retirement savers should consider increasing contributions to 401(k)s, IRAs, or HSAs to take advantage of enhanced incentives, especially if you’re over 50 and can make larger catch-up contributions.

For High-Net-Worth Individuals

Now is the time to revisit estate plans and gifting strategies in light of the $15 million per person exemption. While there’s less urgency than before 2026, there’s still significant value in making strategic transfers, setting up trusts, and ensuring spousal portability through proper estate tax filings.

The Planning Reality Check

“While many of the tax cuts and deductions feel permanent, nothing in the tax code is truly set in stone,” Silva reminds us. “In the future, Congress can change the rules at any time.”

The smart approach is to take advantage of current benefits while building financial flexibility for potential future changes. Some of the new deductions, such as those for tips, overtime, and car loan interest, are temporary and will expire after a few years unless renewed.

Economic Implications to Watch

Investment and Growth

The bill is likely to give U.S. investment a boost over the next few years. Lower taxes and larger deductions mean businesses have more money to invest in equipment, property, and hiring.

Inflation and Interest Rate Considerations

More money moving through the economy can put pressure on prices, but the economic picture remains complex. While increased demand could push inflation higher, recent economic indicators suggest the Federal Reserve faces competing pressures when setting interest rate policy.

For anyone considering major financial decisions like home purchases, refinancing, or business loans, it’s worth noting that rate movements could go in either direction. Given this uncertainty, it may be wise to evaluate both fixed and variable rate options based on your specific situation and risk tolerance.

What to Do Now

Immediate Steps:

• Review your withholdings and estimated payments for 2025
• Evaluate whether new deductions (tips, overtime, car loan interest) apply to your situation
• Consider the timing of major business equipment purchases to maximize depreciation benefits
• Review retirement contribution strategies

For Business Owners:

• Assess whether your business structure optimizes the permanent pass-through deduction
• Review debt financing strategies given enhanced interest deduction rules
• Plan equipment purchases to take advantage of continued bonus depreciation

For High-Net-Worth Individuals:

• Update estate planning documents to reflect the $15 million exemption
• Consider gifting and trust strategies with the increased capacity
• Review QSBS positions and exit timing strategies

The Bottom Line

“The bill gives a window of lower taxes, but it won’t last forever, so the smart move is to take advantage now without getting caught off guard later,” Silva explains. “Run the numbers a few years out, plan for what happens if taxes climb again, and keep enough cash on hand so a future tax hike doesn’t throw you off balance.”

The complexity of these changes means one-size-fits-all advice doesn’t work. Your optimal strategy depends on your income level, business structure, family situation, and long-term financial goals.

Ready to turn these tax changes into a strategic advantage?

Our team specializes in helping businesses and individuals navigate complex tax legislation and develop practical strategies that make sense for their unique situations.

Contact us to discuss how the Big Beautiful Bill impacts your specific circumstances and what steps you should take now. Still have questions? We’re here to help.