Congress passed a major tax bill in July 2025, and President Trump signed it into law. This new law makes many tax cuts from 2017 permanent and adds new benefits for families. It also tries to reduce some government spending to help pay for these changes.
This matters because taxes have been uncertain for years. Many tax cuts were going to expire at the end of 2025, which could have meant big tax increases for many people. This new law removes that worry.
Your taxes affect how much money you keep and how you plan for the future. Many investors also worry about government debt and spending. Let's look at what this new tax law means for your money and investments.
Tax rates stay low permanently
The new law, called the "One Big Beautiful Bill," keeps many tax benefits and adds new ones. Here are the main changes that could affect your family:
- Current tax rates are now permanent. They were going to go up in 2026.
- The standard deduction goes up to $15,750 for single people and $31,500 for married couples.
- People 65 and older get an extra $6,000 deduction if they earn less than $75,000.
- The child tax credit increases from $2,000 to $2,200 per child.
- You can deduct more state and local taxes - up to $40,000 instead of $10,000.
- Workers who get tips can deduct up to $25,000 if they earn less than $150,000.
- Some green energy tax credits are removed, like those for electric cars.
These changes keep taxes relatively low. The chart shows that today's tax rates are much lower than they were for most of the 1900s, when top rates were often above 70%.
Government debt keeps growing
Tax cuts mean the government collects less money. This usually leads to more borrowing since it's hard to cut spending on things like Social Security, Medicare, and defense.
The government already owes over $36 trillion - that's about $106,000 for every American. This new tax law will add about $3.4 trillion more debt over 10 years.
There are no easy answers to this problem. Tax cuts can help the economy grow, but the government hasn't balanced its budget in 25 years. For investors, it's important to have diverse investments that can do well in different situations rather than trying to predict what will happen with government debt.
Estate tax limits stay high
The new law also keeps high limits for estate taxes. These are taxes paid when someone dies and leaves money to their family. The limits are now permanent at $15 million for individuals and $30 million for couples.
Even if you don't have that much money, it's still important to plan how to pass assets to your family. This includes thinking about taxes, giving to charity, and protecting family wealth over time.
The bottom line? The new tax law keeps taxes low and adds some new benefits for families. For investors, it's important to build a financial plan that works with these tax rules and to focus on long-term goals rather than worrying about government debt.
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA / SIPC. Financial planning offered through M Financial Planning Services, a Registered Investment Advisor and a separate entity.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.