Key Provisions in the Amended Bill

• SALT Cap Raised: State and local tax deduction cap raised to $40,000 (temporary, first five years) 

• Tax Breaks: Deductions for overtime and tips; expanded child tax credit ($2,200 per child); auto loan interest deduction on U.S.-assembled cars

• Senior Tax Relief: A $6,000 (individual) / $12,000 (joint) deduction for seniors phased out above certain incomes—this helps many avoid federal tax on Social Security, but doesn't repeal it entirely 

• Debt Ceiling Included: Bill also raises the debt limit by up to $5 trillion via budget reconciliation to avoid partisan gridlock

• Spending Changes:

  • Massive allocations to border security and ICE, including tens of billions for deportation infrastructure

  • Major Coast Guard and Arctic security funding – largest in U.S. history

  • Defense, missile defense (“Golden Dome”) and agriculture provisions included

• Health and Social Program Cuts:

  • Projected Medicaid and SNAP reductions

  • Reduced funding for clean energy credits, student loans, and public health programs

• Fiscal Impact: Revised estimates put the bill's added deficit impact at $2.8–3.4 trillion over 10+ years

What to Expect Next

• • IRS will roll out new tax deduction rules for tips, overtime, senior taxpayers, child tax credits, and auto-loan interest.

  • Social Security Administration communications may still be confusing—recipients should note deductions help offset, but do not repeal, Social Security tax liability 

  • Federal agencies and Postal Service, Coast Guard, ICE and DHS will execute major hiring and operational expansions.

  •  SOCIAL SECURITY: What the Bill Really Does (and Doesn’t)

  What’s Included:

  • A new “Senior Tax Relief Deduction”:

    • $6,000 for single filers / $12,000 for married couples, phased out above ~$100,000 (single) / ~$200,000 (joint).

    • Designed to offset taxes on Social Security benefits, but does not repeal those taxes.

    • Applies on top of the standard deduction—effectively increasing the amount of income a retiree can receive before paying federal tax.

  What It Doesn’t Do:

  • Social Security benefits are still subject to taxation—up to 85% depending on total income (combined income includes AGI + nontaxable interest + ½ of Social Security)

  • The taxability thresholds—$25,000 single / $32,000 joint—were not indexed to inflation or changed

  • This deduction is temporary and is set to sunset in 2028, unless it is extended

  Planning Insight:

  If you have multiple income streams in retirement (RMDs, investment income, rental income, etc), this deduction is helpful—but not a panacea. It may create a narrow 3-year window to:

  • Optimize Roth conversions

  • Trigger strategic capital gains

  • Shift charitable giving into high-deduction years

  We may also see increased tax bracket “cliffs” due to the phaseout ranges—requiring even tighter coordination of income timing.

  OTHER FINANCIAL IMPACTS

  1. Expanded Child Tax Credit (CTC)

  • Raised to $2,200 per child under 17

  • Begins phasing out for incomes above $400,000 (joint)

  • Not refundable, so planning is key to optimizing timing and AGI thresholds

  • Useful for high-income taxpayers who still have dependent children or support grandchildren

  2. Auto Loan Interest Deduction

  • Only applies to loans on vehicles assembled in the U.S.

  • Could be worth up to $1,500+ in deductions per household, especially for families buying luxury U.S.-assembled vehicles

  • Creates an incentive to accelerate auto purchases into 2025–2026 under current rules

  3. OT & Tip Income Deductibility

  • Could be valuable for heirs, younger family members, or business owners employing W-2 workers

  • Consider shifting compensation structures in family businesses to take advantage of this

  ESTATE & INCOME TAX STRATEGY SHIFTS

  Temporary SALT Cap Increase

  • Cap lifted to $40,000 (up from $10,000) for itemizers through 2030

  • Opens the door for:

    • Charitable bunching + SALT deduction stacking

    • High-property-tax strategies for real estate-heavy clients

    • Multi-entity structuring for layered deduction harvesting (particularly in states like CA, NJ, NY)

  Seniors: Plan for the 2028 Cliff

  • Use the 2025–2028 period to pull forward income into the deduction window

  • Consider delaying claiming Social Security if you are not yet receiving benefits—let the 2028 sunset play out before electing

  • Integrate donor-advised funds and QCDs more aggressively

  RISKS & HEADWINDS

  • Medicaid/SNAP funding cuts could impact extended families or philanthropic goals

  • Rising deficits may increase future taxes—bolstering the case for today’s Roth conversion strategies

  • Political uncertainty surrounding the bill’s long-term viability means flexibility is essential

  • Credit markets may react to increased federal borrowing, affecting real estate and private credit yield curves

  Summary: Strategic Action Steps

  Strategy	Why It Matters
  Review Social Security claiming plans	New deduction offers temporary planning window
  Accelerate Roth conversions (2025–2028)	Lock in low brackets + tax-free growth
  Utilize bunching strategies	Combine SALT, charitable, and income timing for big deduction years
  Reassess income timing for retirees	Minimize Medicare IRMAA and leverage new deduction phaseouts
  Update multi-year tax projections	Especially for family offices and complex income families
  Consider U.S.-assembled vehicle purchases sooner	Maximize the limited-time loan interest deduction