Trump's Big Beautiful Bill: What You Need to Know for Your Wallet!

Hey there.

And welcome back to this bonus edition of Financially Confident Christian.

I'm your host, Ralph, and today I want to go through something crucial for your financial well being.

A lot of people have been calling and asking and they're wondering how this new tax bill signed by President Trump actually impacts your wallet.

Now listen, I know these are big government bills and a lot of times they can feel like a foreign language.

And let me just tell you right now, this is what I do for a living.

And sometimes these things can be complicated and confusing even for me.

But today my promise is to simply cut through that confusion.

I want to give you the facts.

I want to give you my unbiased opinion from somebody who's been working with taxes now for over 30 years.

I'm going to give you the honest truth.

I'm going to break down the specific details.

But most importantly, and this is what I think the big takeaway is from today.

I want to show you clear, actionable steps that you can take.

Right now.

I'm talking about today and over the next few weeks to make the most of these changes.

And I want to tell you right now, this isn't about politics.

I do lean a particular way and if you listen to my show, you probably can figure that out.

But today's not about that.

Today's about some practical financial information that you need to know and more importantly that you need to understand of how this new tax bill, which is now law, is going to impact you.

So let's get right into it.

Okay, so let's try.

Let's talk about this one big, beautiful bill.

And unless you've been living under a rock, you know that this thing has been all over the news.

And unfortunately my biggest issue with it is there's been a ton of misinformation, there's been all kinds of scare taxes and just complete nonsense about what this bill really is.

And listen, from the beginning, I want to tell you this is a huge package of changes and the truth is it does touch many parts of our economy and it does touch many parts of your personal finance.

So today I just want to break it down into some simple terms, some non accounting lingo, if you will, and give you through the specifics of what this whole bill is all about.

So let's start off with the truth about this one big, beautiful bill.

I want to start by telling you what's really changing.

Now here's the thing.

For most of us, most of us, the big news is that the individual income tax cuts from 2017 are now made permanent.

Now you probably already thinking, Ralph, what are you talking about?

Well, way back in 2017, when President Trump was the president before, there was a bunch of tax changes that were made to individual income taxes.

And at the time, they were set to go away basically in 2025.

So what does this mean for your bottom line?

Here's what it really means.

It means that those low, lower tax rates that you've been seeing for the last, what, eight, nine years, from 10% up to that top rate of 37%, are going to stay here for good.

See, at first this was just a temporary measure.

It was going to go away in 2025.

And that' people were worried about, hey, we're going off this financial cliff at the end of 2025, going into 2026.

So here's the good news right off from the beginning, they won't automatically, those tax rates aren't going to automatically jump back up to the 2026 rates as was previously scheduled to do.

Now you might be saying, ralph, why is that important?

Well, as we plan, as we work to improve your personal finances, one of the things that we have to know is what are the tax rates?

And that stability in tax rates helps you plan your long term income and spending.

I mean, that's really important because you need to understand what tax rates you're going to be living under.

The other part of this is that increased standard deduction.

Back in 2017, again, they basically doubled the standard deduction.

Now they did a whole lot of other things to make room for this, but they've also doubled that standard deduction.

So now that increased standard deduction is permanent.

And see, this is really important for most people because as I've done taxes, like I said, nearly 30 years, actually over 30 years now the majority of Americans now that this, the standard deduction is higher, most Americans are taking the standard deduction because they don't have enough to itemize.

Now let's get into some details of that.

So now the standard deduction is a fixed amount that directly reduces your taxable income.

So if you don't understand taxes, basically it works like this.

You start with whatever your income is, maybe that's income from your W2, from the jobs that you work, maybe interest income.

So a whole lot of things that go into that.

But basically this standard deduction is that first deduction that comes right off of the top.

Now what this means is that for 2025, now this will be indexed with inflation as we move forward.

But this is permanently now $15,000 for single filers and $30,000 for married couples filing joint.

And that are some nuances to that.

But basically, what this means in layman's terms, from a federal income tax perspective, you will pay zero income taxes on your first $15,000 of earnings if you're a single filer and $30,000 of free earnings if you're married couples filing jointly.

Now, if you're ahead of household, and I'm not going to get into the specifics of that, but basically, you're not married or you're living apart from your spouse and you care for a child, your standard deduction is now $22,500.

So again, you don't pay any taxes, get over that amount.

So what this simply means is your income is off limits to federal income taxes from the start.

What that means, it puts more money in your pocket.

Now, had this not been changed, those lower standard deduction rates from prior to 2017 would have kicked in in 2026.

Now, I want to move on to something for families with kids, and you need to pay particular attention to this.

One of the things that you're probably very familiar with is, is what's called the child tax credit.

You may have heard it called the ctc.

And this is getting a significant boost and permanence in this big, beautiful bill.

Now, right now there's a $2,000 per child amount that is the child tax credit.

And that with this bill, is going to be locked in forever.

So there's no more.

That's going to go back to some other number.

But here's the bonus part, and this is the pretty exciting part.

It's temporarily increasing from $2,000 to $2,500 per child.

Now, that's going to happen for tax years 25, 26, 27 and 28.

So if you think about that, right now, we're already in 2025.

So that means if you qualify and there are some qualification limits to this, which haven't really changed your per child tax credit.

Now remember, a tax credit is different than a tax deduction.

A tax credit is a dollar for dollar reduction in the amount of tax you owe.

So imagine what you will.

You're going to have an extra $500 per child if you have children and they meet those requirements, what that could mean for your family.

Hey, we're getting ready to go back to school.

I'm getting ready to start a new series on getting back to school.

Maybe that's an extra $500 for school supplies or maybe those extracurricular activities or maybe right now listen, like everybody else, maybe it's just going to help ease that grocery bill burden.

And here's a really good part about this too, that also can be refunded to lower income families.

So if you've got no taxable income, you can actually get this money back.

And as I mentioned before, this is going to be adjusted for inflation and it's going to be expanded, which can mean more direct cash back to many households even if you owe little or no income tax.

So that's the big takeaway here.

It's going from $2,000, which is now permanent to $2,500 for the next several years.

The bill also expands how you can use 529 education savings accounts.

I'm not going to talk a lot about that, but that's basically a way to put money into an education program and that money grows tax free.

It's going to make the bill actually makes them more flexible for things like now listen, this is another part that people don't understand.

It actually makes it more flexible for using that money for actually kindergarten through the end of high school, for private school tuition, for homeschooling expenses or for trade school.

So that's one of the things that we can talk about in another show.

But that's one of the things that this bill also it does, it expands how you can use those funds.

529 plan.

So what it basically is doing, it's encouraging more families to put money into those 529 plans.

And before you always had to wait till college, but now you don't have to wait till college anymore.

You can actually use that money for private school tuition from kindergarten through 12th grade.

Another thing it does is it enhances the Child and dependent care credit and the adoption tax credit and it's going to give more financial relief for families who have those particular things.

Now here's things that a lot of people been talking about.

Here's some very specific things for those working in certain jobs.

Now this is one that's, that's garnered a lot of attention and that's tip income.

So for the next few years.

Now this is specifically again, it's interesting they carved out these dates, but this is for 2025 through 2028 if you earn tips.

And this has been a great deal of misinformation.

You know, President Trump talked about no tax on tips.

Well, we didn't quite get there.

And that's not meant as a criticism.

But here's basically the way it works with this bill, it's going to allow you to deduct up to $25,000 of that tip income.

So this means that you won't pay federal income tax on those tips up to that amount.

So think about it.

If you're a delivery driver or maybe you're a server or anyone who's earning tips.

My son is a barber.

He earned tips.

Imagine not paying federal tax on your first $25,000 of your income.

Now think about what that can mean for your budget.

But here's some important details you need to understand.

And this is sort of the carve outs.

And I'm going to talk about some commentary here as well.

It applies to occupations that traditionally receive tips before January 1st of 2025.

So the Congress people thought about and they said, wait a second, this is going and this is one of my big concerns.

When people were asking about this, Congress people said, wait a minute, we're going to only allow this to occupations who traditionally receive tips.

Because one of the big concerns I had is all of a sudden business are going to say, hey, you know, I'm not paying you anymore.

Your income is all based on tips.

So they've kind of already drawn the line in the sand here and said that's going to be only for occupations that traditionally receive tips.

Now again, they've also indexed this for higher income people.

So there is going to be what's what's called a deduction phase out.

I'm not going to get into the weeds on that.

But basically for single people, it's going to phase out once you hit $150,000.

And for married couples, $300,000.

It's reduced by a hundred dollars for every thousand dollars you go over.

Again, I don't want to get into the details, but here's a planning thought.

And as I was preparing for this special edition today, I thought about this for a second.

Here's the key to this.

If you're going to take advantage of this.

Now here's the problem.

A lot of people who work for tips don't always report all those tips.

So one of the planning tips you have here is you might think about reporting more of your tips and you might be saying, ralph, why would you do that?

Well, basically you're going to get $25,000 worth of free bonus money for reporting those.

So and here's the deal.

Like you're supposed to be reporting those tips anyway.

If you ever get audited and the IRS looks in your bank account and they say, hey, Ralph, how come you Got all these extra deposits, you were like, well, I don't know.

Sure, they're going to ask you, where did that money come from?

So this may be a way to solve that problem.

But here's a problem.

A lot of people aren't talking about this.

Those tips are still going to be subject to Social Security and Medicare tax.

And I don't want to lose everybody in the minutia.

But basically, if you think about it, let's say right now you're only claiming a portion of your tips.

And again, I'm not telling you not to claim your tips.

I'm telling you to claim your tips, because that's what the IRS code says.

But let's say that you're not.

And you're saying, oh, Ralph, you know what?

I'm going to take advantage of this $25,000 bonus.

Fantastic.

But here's what you need to understand when you do that.

When you say to your employer, hey, I've got more tips, your tax burden is actually going to go up as it relates to Social Security and Medicare.

So that's just something you want to be aware of so that you're not surprised by that.

So overall, here, the good news about this, it doesn't phase out federal tax on all tips, but it does phase them out up to that $25,000 threshold.

So effectively, what that means is on the first $25,000 of, quote, tip income, you're not going to have to pay tax on that.

So that's a good thing.

Now, let's move on to the other big one.

A lot of people have been talking about this tax on overtime pay.

So this one, again, there's a temporary deduction for the premium portion of that pay.

Now, again, this is the carve out for tax years 2025 to 2028.

So again, and I'm not picking political sides here, they say that this is permanent, but it's clearly not permanent.

This is a temporary deduction.

Now for overtime.

Here's what they're going to allow.

You can deduct up to $12,500 for individuals or 25,000 for married couples filing jointly.

So like this tip, like the tip income we talked about a few minutes ago, that tip deduction, this also phases out at that $150,000 or $300,000amount of modified adjusted gross income.

That that seems to be the sweet spot of where they consider the wealthy to start.

$150,000 for individuals and $300,000 for joint filers.

And then there's that $100 for every thousand dollars phase out.

Now, again, here's the thing you got to pay attention to.

You're going to have to start keeping track of your overtime.

If your employer isn't keeping track of your time, it just kind of gets added to your wages.

You need to say to them, hey, employer, you need to start carving this out, because I've got this potential for a tax deduction.

Now, again, the employer is going to have to report that on your pay stub and report that on.

I'm not sure how they're going to do it, honestly, from the W2 standpoint, because we've never had a W2 that showed overtime.

So there, here's a, here's a change that could happen.

See, let me just, let me take a little bit of a detour here for a second.

Basically, the way it works like this, Congress creates a tax bill, the President signs a tax bill, and then it goes to the irs, who actually builds the code around that.

Well, if you think about this now, for this overtime pay and for this tip pay, the IRS is going to have to tell employers how they're going to report that information.

So I think what you're going to see here, and this is just Ralph talking, you're going to see a change to the W2 form, which is just going to make things more complicated.

But that's the only way the IRS is actually going to know how much you had in tip income.

Now, that's kind of already on the W2 form, because there's a, there's a line called Social Security tip earnings, but overtime is not.

So this is something that's going to have to change.

So if you, and it's going to sound kind of harsh, but if your employer is still doing payroll from the Stone Ages, you may need to mention to them, hey, I listened to this guy Ralph.

You might want to think about how you're keeping track of that.

So there's going to have to be some changes to the payroll reporting mechanisms and all that.

Now let's move on to another big one.

Another big promise from President Trump is we weren't going to tax Social Security.

Now, there is a change here and in the tax bill.

It's not what everybody expected.

It's not that we're not taxing Social Security anymore, which is kind of disappointing.

When I was working with clients this year, we had this discussion of, hey, if they can really get this done, this is going to be a huge benefit to a lot of my elderly and Social Security claiming clients.

But here's what they did do.

And this is a help.

I can't say it's not a help.

But here's the deal.

If you're 65 or older.

Now here's a planning tip right away.

A lot of people.

Now, I shouldn't say a lot of people, but many people take Social Security early at ages before 65.

This does not apply to you.

So this is only if you're 65 or older.

But here's the way they basically handled this whole not taxing Social Security.

There's now a new temporary deduction for up to $6,000 per individual.

Now, they made this $12,000 for married couples.

Now listen, here's the key.

If Both are over 65.

So big deal here.

Again, again, we say this is a permanent tax change.

Again, it's not.

It's from 2025 to 2028, and basically it's $6,000 worth of.

You can look at it like this.

It's basically an additional standard deduction because this deduction applies to your overall income, not just Social Security.

So if you're a married filing joint, you're over 65, both of you, you basically have an additional $12,000 worth of, I'll call it free money or reduction in taxable income.

And again, this phases out.

Now, this one is interesting.

They actually phase this one out at $75,000 for single filers and $150,000 for married couples.

So that's just a planning tip.

The other ones were at 150 and 300.

This one is at 75 and 150.

So basically what this is going to do is, is this is going to lower taxes for anybody over 65 by.

By $6,000 individually or 12,000.

Now, I say lower taxes.

What I mean is lower their taxable income, which will trickle down to lowering their taxes.

But basically it's going to reduce taxes.

It's not necessarily cutting back tax on Social Security.

The benefit to this is it's actually cutting your taxes overall.

So this is sort of a.

A good and a bad at the same time.

I was really hoping they were just going to eliminate the tax on Social Security.

But.

But what they've effectively done is they've thrown a little carrot or a little bonus to our friends who are 65 and older and giving them $6,000 worth additional deductions.

So that's kind of the.

To sum up the individual tax stuff.

And I'm going to talk about some planning techniques here in a few minutes.

But I want to move into some Small business, because there's some small business things in here, what we really need to talk about.

So if you're listening right now and you're a small business owner, or maybe you're thinking about becoming a small business owner, this bill has some significant incentives designed to help you build and thrive a profitable business.

Now, one of the big ones, and this is what President Trump brought in the first time he was around this thing called the qbi, which is basically a qualified business income deduction.

If you're real.

Technically, you might have heard it called a 199A.

Now when this was first put in back in 2017, again, this was a temporary thing.

It was going to sunset in 2025.

Well, now that's permanent.

But here's the even better part.

They've even made it bigger.

So this is a key deduction for those of you who are LLCs or subchapter S corporations.

It's just a fancy way of saying businesses like yours where the profits are taxed on your personal tax return, not at the corporate level.

It's a pass through.

Again, I don't want to get lost in the details, but if you own an S corp or you own an llc, you're taxed not at the company level, but at your personal level.

Again, this was set to expire, so now it's permanent.

But here's the beautiful part, they've increased it from 20% to 23% beginning after this year.

So that's interesting planning technique as well.

So it's not going to be effective for 2025, but starting in 2026, you're so you're going to still get it to 20% deduction in 2025, but starting in 2026 it's going to go up to 23%, which basically means a larger portion of your business profits are going to be tax free, which puts money directly back into your company because you're not going to have to pay taxes on that 20% in 2025 or 23% moving forward.

And really, when I think about it, I got a lot of small business clients.

This is really a huge win for small business clients and their cash flow.

Another big thing it did for businesses that buy equipment or machinery, the a hundred percent bonus depreciation is back and it's permanent.

Now you might be saying, Ralph, I have no idea what you're talking about.

Bonus depreciation.

Think of it like this.

Let's say you buy a $50,000 piece of equipment for your business.

You need a new Machine need a vehicle, something like that.

And the government says, great, here's the best part of this.

With this bonus depreciation, you can instantly wipe $50,000 off of your taxable income this year.

So if that equipment is 50 grand, guess what that does.

Even if you didn't pay for it, you can get a loan for it.

You can be paying over time.

You can take that and knock that right off of your business income.

So this means if you buy qualified property for your business, things like new vehicles, maybe you need a new service vehicle or computers or any specialized equipment, or even certain property improvements, like leasehold improvements.

Again, I'm not going to get into the minutiae with that, but you can now immediately deduct the entire cost of that item in the year that you put this into service.

So this is a powerful financial tool that significantly lowers your taxable income.

This provision is effective.

And again, we're playing games with dates.

It cracks me up when they do this.

But this is effective for any property acquired and placed in service after January 19, 2025.

Again, I'm not sure why they picked the 19th.

I think it has to do with when President Trump was sworn into office.

Again, but anyway, and honestly, at this point, here's the problem.

If you bought something before January 19th, you still have to live under their old rules.

But from this point forward, you can live under these new rules.

And this is a tremendous incentive to invest in your business's growth and modernization.

So if there's equipment that you need to buy, like, this is the kind of conversation I have with my small business clients all the time.

Hey, Ralph, I'm thinking about buying a new service truck or hey, Ralph, I need to buy this machine to do what we do on our business.

How does that impact my taxes?

Well, now you're going to be able to get that 100% bonus depreciation.

So again, you don't have to spend the money for it.

You can get a loan for that, you can get that, you know, pay it over time.

A lot of people don't understand that, but this is a great incentive to invest in your business.

Now, I want to move on to some things beyond these major individual and business tax changes, because this is stuff you've been hearing a lot about in the news and people have been spreading all kinds of misinformation.

But the one big beautiful bill does include several other impactful provisions that you should know about.

Now, one of the ones that, that you may have heard about is this thing called the salt cap.

Basically that state and local income taxes right now, there's been since 2017 when they increased the standard deduction, they put a cap on state and local income taxes.

And it's been really controversial for those people who live in high income tax states like New York or California.

And basically what that did is it said, okay, that's fine, but you can only deduct up to $10,000.

Here's what they've done.

And again, crazy dates for tax years 2025 through 2029, they're going to take that cap and expand it to $40,000 again for people with modified adjusted gross income below $500,000.

So this is a huge temporary boost for homeowners in high tax states.

So if you live in a state like New York or New Jersey, I'm just using those as examples.

I'm here on the east coast and I do a lot of tax returns in those states.

But if your state income taxes are higher, you happen to have pretty good income.

You've been capped at $10,000.

But now all of a sudden they're going to expand that.

So basically what that means is that more people may actually be able to itemize if they live in those states.

So it's going to make taxes a little more complicated, but it's going to be a tax windfall for those folks.

Now, unfortunately, after 2029, this thing goes back to $10,000.

So I'm going to tell you one of the commentaries I read on this was enjoy this tax relief while it lasts, but plan for now.

Perhaps this is going to be a down the road tax bill where they're going to kick that can up a little farther.

Again, they picked to 28 on the other ones, picked a 29 on this one they made the income threshold 500,000, where the rest of them were 300,000. Who knows?

I'm not at that pay grade to understand this.

Well, let's move on to another provision and that's in the area of estate and gift taxes.

So the higher estate and gift tax exemption amounts from 2017 were also set to expire, but this bill again makes them permanent.

So this is a big one as well.

Basically what this means, because I can get into all kinds of, you know, sideways discussion, but basically what this means is if you have less than $14 million in your estate when you pass away, there is zero income tax at the federal level.

Now it's 28 million for married couples.

And again, this is just with inflation, this isn't going to affect most people this is only going to affect high net worth individuals and, and people planning for those wealth transfers.

So again, what they basically done, what this was going to do before is it was going to go back down to a lower rate.

I think it was around five and a half million dollars, but basically it's going to stay at 14 million.

So for most of us, me included, never going to be an option because I can't see my estate being worth more than $14 million.

But if you happen to be one of those people listening, fantastic.

It's going to stay at 14 million and 28 million for a married couple.

Now here's one of the new things that comes around.

These are called Trump accounts.

There's a new savings account for children.

So this bill, and this is brand new, this is not current tax law, this is something brand new.

This bill creates a new tax deferred savings account for children.

A lot of people have called this the Trump accounts.

Let me get into the details of this.

These accounts can be open for children age 8 or under.

So that's the big key.

And it allows for contributions up to $5,000 per year, with some exceptions, until the child turns 18.

So basically these accounts can be open for children age 8 or under and allows contributions up to $5,000 per year until the child turns 18.

So what's the point of this?

Well, contributions here are similar to those non deductible IRA contributions.

And when the child turns 18, the account would effectively convert to a traditional IRA.

You might be saying, Ralph, I don't get it.

Well, here's a unique feature of this.

Parents of newborns.

And again, again, why we carve out these little nuanced things, I have no idea.

A unique feature of this.

Parents of newborns born between January 1, 2025 and December 31, 2028 could also qualify for $1,000 in what they call federal seed money to start the account.

So basically it's going to be free money.

This is a new long term savings option for families.

So again, if this applies to you, I don't have a lot of details on this, but it sounds like you're basically going to.

If you have a child born either in 25, 26, 27 or 28, it sounds like the government's going to give you a grand to start, to start this.

So hey, that's money on the table, so don't lose sight of that.

I'll keep you up to date with new ideas on this.

But basically it's $1,000 worth of free money.

Now Another thing that this bill has done, and this is again for non itemizers.

So if you're like most people, you found yourself in that standard deduction is just too high for those who take the standard deduction, which again I mentioned a few minutes ago, for most taxpayers, this bill establishes a new temporary universal charitable contribution deduction.

Now this was common.

They did this during the pandemic.

So what they were doing back then is you could deduct up to $1,000 for individuals and $2,000 for married couples.

Well, they brought that back.

So now, and I think back then it was $600 or 300, 600, don't remember exactly.

But basically what this does is it allows you to deduct $1,000.

So even if you, even if you don't itemize, even if you take the standard deduction, you can still deduct $1,000 for individuals and $2,000 for married couples in cash contributions to qualifying charities, even if you don't itemize.

And again, this is not permanent.

This is through 2028.

You might be saying, ralph, why does this matter?

Well, here's why I think it matters.

It really could encourage more giving from average Americans.

Average American, the person who doesn't have high interest on their mortgage doesn't pay high state and local income taxes.

Now that we have that SALT limit, you're going to be able to deduct to that.

So this is one of the things that, that might be helpful.

However, I want to make this note, other provisions in a bill might reduce the incentive for large charitable gifts from high income itemizers and corporations.

So that's just a little caveat that I wanted to mention because it's something.

But basically what this basically means in real, everyday realistic terms is if you itemize now, if you're single, you're going to be able to deduct a thousand dollars and if you're married, filing jointly, $2,000.

So big planning tip.

If you're a lot of people, a lot of my clients say rap, I don't keep track of that stuff anymore.

Well, now you want to keep track of it because now you're going to be able to deduct it.

So hint, hint, keep receipts of any cash donations.

Now when I say cash, that means a check or any kind of giving platform.

We're not talking about stuff, we're not talking about the goodwill or the charity, any kind of stuff that you give, like used goods and things like that.

This is cash or cash equivalents.

So just keep track of those Receipts.

Now here's another provision, and this is another temporary one.

There's a thing called the vehicle loan interest deduction.

This is a new temporary deduction for interest paid on car loans.

This is included in this.

And I remember when I was just a wee little lad, I was, if you've listened to my show, you know, I started doing taxes when I was around 8 or 9 years old.

And I remember back then you used to be able to deduct some interest from other things.

So now for the next four years, again, here's another one of those provisions.

From 25 to 28, you can deduct up to $10,000 in car loan interest payments for vehicles.

Now here's the, here's the catch.

And being an American, I'm cool with this.

But you can deduct up to $10,000 in car loans interest payments for vehicles whose final assembly took place in the US this is a big windfall if you think about it.

So now $10,000 in car loan interest is deductible.

Now this deduction applies to single taxpayers.

Now again, more arbitrary numbers for single taxpayers who have modified adjusted gross income of $100,000 or less or $200,000 or less for married couples.

So this could really be a huge savings for those, for those financing new American made vehicles.

So another good one.

I like this one.

Again, there's certain phase outs.

It's very clear to me that the main target of this was not high income individuals.

So again, I want to get political, don't want to go down that road.

But the truth of the matter is, besides the estate taxes staying where they already were, every single one of these provisions is really impacting people who make less than $100,000 a year if they're single and $200,000 a year if they're joint.

So if you hear in the news that this is only helping the rich, that's nonsense.

You can say, hey, I listened to Ralph's show and he told me otherwise.

But now I want to give you the full honest picture.

I told you at the beginning I wasn't going to get political.

I told you I wasn't going to get biased on anything like this.

So I want to give you the full honest picture.

And here's the truth.

Any major bill this large has different impacts and it's important to be aware of them.

It just does.

And people.

And listen, this is all brand new.

Most of the details that I got from this are still being hashed out.

This thing's 900 and some pages long.

And again Congress approves it, the president signs it, but then the IRS has to actually implement this.

So there's going to be some back and forth things on it.

But this one big beautiful bill also does include some things that you've heard about in the news.

There is a significant reduction in funding for certain social support programs.

Yes, there is for Medicaid and for the Supplemental Nutrition Assistance Program.

A lot of people call that SNAP or food stamps.

There is in that.

And it also adds new work or community engagement requirements for some of these programs and increase state responsibilities for funding.

Now, listen, I said I wouldn't get political.

I'm going to say this.

I have no objection to these things.

Basically what they're doing is they're encouraging people to be involved in work.

And I don't have all the details.

I'm not going to get into a contest of, well, Ralph, you said this.

No, that's not what I'm saying.

But it does encourage people to look for work and, and to get engaged with their community in order to qualify for these programs.

And it pushes a lot of this back to the states, which in my personal opinion is not a bad thing.

So there are tax benefits in some areas, but there are also shifts in government spending on social safety nets that will affect people.

That's just the truth.

I'm just saying that you get into the details of it, but that is just the truth.

And additionally, it's important to note that many financial analysis project and here's another big one, I want to just, I want to lay this out for you because again, I told you I wouldn't.

I was going to cut through the nonsense many financial analysis project that these tax cuts along with other spending increases will add substantial amount to the national debt.

Now you can listen to the Republicans, you can listen to the Democrats, you can listen to the independents, but many people, and again, I haven't got into the details, so I can't comment on this directly, but some analysis estimate it will be over $3 trillion in debt over the next decade.

So you need to understand that if you're one of these people that's a budget hawk and you're really trying to reduce the deficit, this bill appears to go in the other direction.

Now, a lot of people can argue, and I actually take this side of the fence, that by generating more stimulus to the economy, you actually grow revenue.

So again, the jury's out on that.

But it could impact the financial implications for the national debt.

Now, I gave you all the details, but now I really want to get into the, the action plans that you can do right now because you might be saying, Ralph, what does all this mean for me?

And what practical actionable steps can I take to really manage effectively given these new rules?

Because there are some new rules, there are some extensions, but I want to get into that right now and tell you what some things are that you can do.

Action step number one, and this is really important, you've got to review your tax withholding or estimated payments immediately.

So if you're an employee, this is a great time to take a look at your W4 form.

That's the form that you give your employer to tell you how much you want withheld from your paycheck.

It might be an opportunity to adjust it so less tax is taken out each paycheck.

You might be able to do that because now you've got a $2,500 child tax credit.

Maybe you live in one of those high income tax states where the salt cap is going to go to 40,000.

It might be an opportunity to reduce your withholding and put some more money in your pocket.

And if you're self employed, if you're an individual or a small business owner, it's another time to check those estimated tax payments because you may not have to be paying in so much.

If you've got, you know, lure with the lower permanent rates and higher deductions, you might be overpaying your taxes throughout the year.

So here's a hint, here's a planning thing.

You can adjust your withholding or your estimated payments and that could truly mean more money in your bank account each month.

Now, of course, you can also wait.

A lot of my clients are take the position of Ralph, I'll just wait.

It'll be a bonus at tax time.

You can do that.

You're not going to lose the money.

But if you want to be keen about planning, you could revisit that.

Maybe schedule an appointment with somebody like me and sit down and do a mid year tax plan and determine how this is going to impact you.

Well, and this is important because it helps you manage your cash flow more effectively.

You're not waiting till tax time.

Keep more of your money now so you have it available to pay down your debt or build up that emergency savings fund I talk about on the show or maybe do some investing rather than giving the government an interest free loan.

It's a little row for it.

So many clients.

And when I was young in my practice, I would always sort of get an attitude when they Come in to get their taxes done, they'd be getting this huge refund.

And I would say to them, hey, you know, you're getting this huge refund, you don't really need to give the government your money all year long.

Oh Ralph, that's the only way we can save it.

And I used to really battle them.

But it is true.

If you're getting a big refund and I'm going to stop here, I'm not going, I'm going to end the Ralph rant a little bit.

But if you're getting a big refund, that means the IRS is or the government more, more closely is using your money as an interest free loan.

So action step here is take a look at your withholding, take a look at your estimated tax payments.

Maybe you can free up some of that and give yourself some more take home pay.

Second action step now this applies to small business owners.

It's really a time to evaluate some investment opportunities and discuss them with your tax advisor.

So if you've been thinking about buying a new equipment or a new vehicle or maybe making some significant improvements to your business, now is a prime time to act.

With that 100% bonus depreciation now permanently available because you can essentially deduct the entire cost in a year, you buy it.

And with that qbi, that's that qualified business deduction increasing, more of your profits are going to stay in your business.

Why does this matter?

Well, smart investments timed correctly with these tax incentives can lead to business growth.

They can lead to increased efficiency and significantly lower taxable income for the year, which in the end boost your overall profitability.

So that's the big business thing.

Now let's talk about some action steps for families to, to maximize your child related tax benefits and explore new savings options.

So if you have children, make sure you understand that boosted child tax credit, especially that increase to $2,500.

Like I said, it's going from 2,000 to 2,500.

Understand what that means?

That's an additional $500 tax credit.

That's real tax dollars.

You also want to look at the 529 plans, talk with your investment advisor or your broker and see whether it makes sense to start doing those now that you can use those for more, more things.

And also consider that new Trump account and again I'm calling them what the commentators are calling it for children might make sense for your long term saving strategy.

And don't forget about that extra grand which could be free money to you see utilizing these tax benefits and Savings tools can free up money in your household budget.

I talk on the show all the time about living within your means and how to maximize your budget.

Well, you can allocate these savings to critical financial goals like saving for your home or putting more in retirement or simply managing your daily expenses where more comfortable.

What I talk about on the show all the time, more cushion or more margin.

Action step number four.

If you get tips or overtime, this is the time to maintain meticulous records, like if you're a server or if you're a delivery driver or anyone else who gets tips or if you, if you earn a lot of overtime.

And this is the critical time to keep excellent detailed records of all your income.

Like I talked about as we were going through that, these new temporary deductions for tips in overtime are valuable, but you're going to need accurate documentation to claim them correctly on your tax return.

So make sure you understand what I was talking about.

Keeping track of your tips, maybe deciding to report more of those and really making sure that your employer is keeping track of that overtime.

I know a lot of small business clients or business people, they just throw it on the W2 or they just throw in your pay.

Stubborn, but they're not really segregating out, which is overtime.

And that's why this proper record keeping ensures that you can take full advantage of legitimate tax deductions.

Hey, and in the end that allows you to keep more of your hard earned money and avoid IRS issues.

Let's talk about an action step for seniors.

I want you seniors to really understand a temporary income deduction and the existing benefits.

So again, I'm going to go back and kind of rehash this a little bit.

But if you're 65 or older and especially if your income is below those thresholds, and again, remember this threshold was 75,000 for single and 150,000 for joint.

Investigate how this new temporary $6,000 or $12,000 deduction, and the truth is it will significantly lower your taxable income.

And remember, you still get the existing standard deduction for seniors.

So basically your standard deduction is going to be supersized.

And it really the thing I like about this, I really wish they had gone the extra step and actually said, listen, we're not going to tax Social Security, but I truly believe this is at least a step in the right direction.

And this can help you maintain your financial stability in retirement, preserve your savings and provide more flexibility in your budget.

Now, for homeowners and car buyers, remember what we talked about there?

So if you own a home, especially in one of those high state, those high income tax states, be aware of the temporary increase in that SALT deduction.

So now why you might, why a lot of people don't over overthink this, you might be like, oh, you know, I go see my tax guide at the end of year, Ralph, I never have enough to itemize, so I don't even bother.

Well, now you might be able to.

So now it's time to start keeping track of those medical deductions again.

Keeping track of the state and local income taxes, keep track of the mortgage interest, keep track of those charitable contributions.

Because now with that SALT cap increasing, you may actually be able to itemize again.

I think there's a lot of people are going to miss out on this if you're not careful.

And if you're planning to buy an American assembled car with it, with a loan, you can deduct that new temporary car loan interest deduction.

Now again, these are targeted deductions that can provide significant savings for specific group of taxpayers putting more money back in your pocket.

Now here's an action step for everyone and I want to just take a minute and pause here.

This is a time to use this bill as a catalyst to review your entire financial plan.

This is a great time to do this.

See, when any major change in tax law happens, it's a perfect time to sit down and thoroughly review your entire financial situation.

A lot of us live in this situation.

We just kind of do the same thing every year.

I see clients at tax time, they kind of do the same things.

But this is a time to really say, you know what, let's think about how does this impact me?

What are the changes here?

What is this going to look like for me?

It's a great time to look at your budget, to look at your debt repayment strategies and even your emergency savings plan and your investment plans and see, can I tweak some things?

Has this bill given me some more take home pay?

Because you might find that you've got more disposable income due to these changes.

And rather than just say, hey, it's a windfall, let's go have some impulse shopping buys.

It might be an opportunity to strategically use it.

Maybe this is a time to pay off some high interest debt faster or to build up that emergency fund from maybe three months to six months.

Maybe this is a great time to finally increase that 401k at work or that IRA that you have.

Or maybe this is going to be a catalyst to save for that down payment for that house you've always wanted to.

And this matters because proactive financial planning is essential to building wealth and achieving financial freedom.

So don't just let these potential tax savings disappear.

It's.

It will be real easy to just kind of say, yeah, you know, status quo, Ralph.

Yeah, we're going to have some tax reductions, but don't let that happen.

You know, direct them towards your most important financial objectives.

And don't hesitate to seek professional guidance here.

As I've said a couple times today, I've been doing this for over 30 years.

Tax law can be complex, and I've given you a comprehensive view.

I've laid a lot of it out for you.

Your specific financial situation is unique.

It's one of the things I talk about on my show all the time.

It's not simple.

It's not, hey, well, everybody's going to be affected by this.

So I'm going to again, encourage you to consult with a qualified tax professional, somebody like me, a public accountant or a financial advisor, because we can provide personalized advice tailored to your specific individual income, to your family situation, and to your business structure.

I'll put some links in the show notes if you want to schedule an appointment with me to sit down and go over this.

Because expert advice can help you navigate complex tax rules, ensure you're taking advantage of all the applicable benefits, and here's the big part.

And avoid costly mistakes.

See when there's opportunities, also threats and mistakes to ultimately optimize your financial outcomes.

So there you have it, friends.

A whole lot of stuff in this one big, beautiful bill is now law.

It's the law of the land.

It's been signed.

It is happening.

It's where we are.

And it's going to impact our finances in various ways.

So you need to understand those things.

Your responsibility is to understand these changes and take those proactive steps to manage your money effectively.

Now, before I sign off today, I want you to do something for me.

If you found this episode helpful, maybe you learned something that can truly impact your financial future.

Well, do me a favor.

Share this episode with someone else that you care about, someone else that maybe a friend or a family member, hey, even maybe a business colleague.

If you know a small business owner worried about their bottom line, send them this episode.

Or maybe you've got a friend with kids who could really use that child tax credit boost.

They'll text them the link.

Help us all cut through the confusion, because here's the truth.

A simple share can make a huge difference for someone's financial confidence.

And remember this, our brand promise here at Financially Confident Christian is to help you truly be a financially confident Christian.

So just share them our website, that's financially confidentchristian.com and you know, the truth is, this goal of this show is all about helping you better understand and manage your finances in a more secure and prosperous way.

So as I close today, I hope this special episode has provided you with clear I know it's gotten a little bit into the weeds at times, but I really wanted to put this out there because there is so much misinformation.

So put this knowledge to work for your financial benefit.

And as I always end this show, until next time, be well, be financially wise, be financially savvy, and stay confident in your financial journey.

God bless you and you have a great day today.