Here’s what the “Big, Beautiful Bill” might mean for your money

The ambitiously branded legislation crossed the finish line in the House late last week, on a party-line split of 218 to 214, and Trump signed it into law on July 4th. The bill is arguably one of the most controversial laws Washington has passed in recent years — and for good reason, as it’s likely to have material implications on the finances of many Americans.

Let’s start at the top: The nonpartisan Congressional Budget Office estimates that the law could add just over $3 trillion to the national debt between now and 2034. Republican proponents have dismissed the CBO, and say the bill’s tax breaks and the growth they might stimulate will offset these new deficits. (This sort of trickle-down economics has produced mixed results for decades, though.) What this means for your money: The U.S. already pays over $1 trillion a year in interest — more than on defense and Medicaid combined — and adding $3 trillion more could accelerate long-term risks. The CBO estimates that unchecked debt will shrink U.S. income growth by 12% over the next 30 years, meaning lower take-home pay, higher borrowing costs, and less room for future public investment.

Now let’s get into the tax aspects of this bill. 

• Trump’s 2017 tax cuts are here to stay. The bill makes permanent lower tax brackets; a larger standard deduction ($15,750 single / $31,500 joint); and the 20% pass-through business deduction. The estate tax exemption also rises to $15 million per person starting in 2026.

• Families receive expanded tax breaks. The child tax credit rises to $2,200 (with $1,700 refundable), and non-itemizers can now deduct up to $1,000 ($2,000 joint) in charitable giving. There’s also a new so-called Trump Account — a government-seeded savings account with an upfront $1,000 deposit for every child born from 2025 to 2028. Parents can contribute up to $5,000 a year; employers up to $2,500, and balances grow tax-deferred in a U.S. index fund. (Think of it as akin to a 529 plan.) Withdrawals are taxed as long-term capital gains.

• Workers get temporary deductions. Tip income (up to $25,000), overtime pay (up to $12,500), and car loan interest (up to $10,000) can now be deducted, though all those deductions expire after 2028 and are subject to income limits.

• Seniors get a bonus deduction. Taxpayers aged 65 and up can deduct an additional $6,000 (or $12,000 for couples), with the benefit phasing out above $75,000 for individuals and $150,000 for couples. Like several other provisions in the bill, it’s set to expire in 2028 — an election year (a timing choice that feels a bit more strategic than incidental).

• The SALT is cap lifted (for now). The state and local tax deduction cap increases from $10,000 to $40,000 starting in 2025 for those with an income of under $500,000. It phases out and reverts in 2030.

• Medicaid and SNAP budgets are slashed. The bill includes $1 trillion in Medicaid cuts and tighter eligibility for food stamps.

• Climate tax credits gutted. EV and home energy incentives vanish after 2025, years ahead of schedule.

Student loan borrowers are also impacted

• Borrowers now have a lifetime limit.  Total federal loan borrowing is now subject to a lifetime cap of $257,500. That includes caps of $20,500/year and $100,000 total for grad students; $50,000/year and $200,000 total for professional degrees (like law or medicine); and $20,000/year and $65,000 total for Parent PLUS loans.

• Grad PLUS loans are gone. Graduate students will no longer be able to borrow up to the full cost of attendance through this program.

• Repayment options are shrinking. Starting in mid-2026, new borrowers will have to choose between a standard repayment plan and a new income-based option called the Repayment Assistance Plan (RAP).

• No more hardship pauses. The bill eliminates unemployment and economic hardship deferments, which many borrowers have relied on to pause payments during tough times.

• Short-term training gets a boost. Pell Grants will now be available for workforce-focused, short-term programs, expanding access beyond traditional degrees.

Other ways this might impact you

• Energy bills could rise. With solar and clean energy tax credits ending early, future home upgrades may get more expensive — and rising electricity demand from AI and data centers could push prices up even faster.

• Public safety nets are shrinking. Cuts to Medicaid and food assistance will affect millions — but not evenly. Some states and localities may be able to offset a portion of the slashed federal funding, while others, especially those with tighter budgets or higher reliance on these programs, will feel the squeeze more acutely. Even if you’re not directly affected, the downstream pressure on hospitals, schools, and community services could still ripple through your local economy.

• Consumer protections are weaker. Funding for the Consumer Financial Protection Bureau is cut in half, which could mean more hidden fees, predatory lending, and weaker prosecution of financial wrongdoing.

Depending on which side of the political spectrum you fall, you may be feeling pretty dismal about this bill — or pretty jubilant. How exactly all these changes impact your financial situation depends on details unique to your life and the extent of your exposure to the tax code, safety net programs, or the debt-driven pressures now looming over the broader economy. For better or worse, the Big Beautiful Bill is now law — so it’s worth paying close attention to where you fit in its design.