While cutting taxes for seniors is a good thing, it is not the same thing as eliminating taxes on Social Security, as claimed in the Social Security Administration’s recent letter to millions of recipients. Sadly, the SSA appears to have conflated two issues [a tax deduction and impact on Social Security] for political purposes (surprise, surprise) which in turn creates unrealistic expectations for many seniors who live on fixed incomes and rely on the government benefits for their existence.

The One Big Beautiful Bill Act (OBBBA) modestly expanded the scope of Health Savings Accounts.

When it comes to encouraging charitable giving, the One Big Beautiful Bill Act (OBBBA) is, at best,  a ‘mixed bag.

The phaseout provisions of the One Big Beautiful Bill Act (OBBBA) could lead to implicitly higher marginal income tax rates. As we know from prior experience, the Tax Code is full of hidden traps. The OBBBA has just added a few more traps, like ‘non-published’ marginal tax rates, triggered by its many new phaseout rules. Maybe folks should not work so hard to earn their bonuses if the result is that they are phased out of some of these helpful income tax deductions.

We are only just learning the pros and cons of a Trump Account, compared to a 529 account or some of the other tax-deferred savings rules in the Tax Code. Fortunately, the IRS has the better part of a year to come up with Proposed Regulations that will provide examples and also answer some of the lingering questions.

Naming a trust as the beneficiary of an IRA results in several computations, starting with determining the payment period (i.e., does the trust qualify as a ‘see-through’ trust), then determining the required minimum distribution (RMD) amount for the year, and then following the RUPIA 90%-10% allocation, and finally allocating the IRA’s internal income when distributions are made from the trust. Best to add a provision to the trust, if it is expected to receive a large IRA, to specifically address the trustee’s allocation responsibilities and try to avoid some of the default provisions of the RUPIA.

The new Tax Act provides a new auto interest loan deduction, but how many borrowers will really benefit once all the law’s conditions are satisfied? The phaseout level starts at low amounts for individuals who are likely to be able to afford a new car. And as mentioned, given the price differential between new and used cars, the tax-savings of deducting loan interest will probably not be enough to justify purchasing a new car just to claim the interest deduction.

Some possible changes are afoot regarding 401(k) plans, including who is eligible to participate in the plan, and the prospect of opening 401(k) plans to private market investments.

The One Big Beautiful Bill Act (OBBBA) created a new deduction under the Tax Code called the senior deduction. The Act added IRC 151(d)(5) to the Tax Code. This deduction is up to $6,000 for individuals age 65 or older. The deduction is part of the Tax Code through 2028, unless Congress decides to extend it. This senior deduction starts to phase out for an individual when his/her income reached $75,000 (or $150,000 if married and filing jointly.)

The new limit on itemized deductions for those in high income tax brackets applies to estates and trusts. While a 2/37th reduction in deductible expenses does not seem like it is too big an impediment, when the expenses are large enough, especially with estate administration expenses, the loss of itemized deductions can be punitive.