How the One Big Beautiful Bill Act shapes financial planning for every generation | Sponsored: Gregory Ricks & Associates

The One Big Beautiful Bill Act (OBBBA) carries wide-reaching financial implications for governments, businesses and households. Restructured funding timelines provide short-term budget relief for states and agencies, but could push some costs further into the future. Individuals may face new paperwork and financial planning considerations.

“There are a number of things in the bill that are set to change at different points because they are kind of obligated to make the math work over time,” said Gregory Ricks, founder, CEO and wealth advisor at Gregory Ricks & Associates. “I think that especially now, it’s important to understand where you stand on taxes so that you can plan future strategies. We understand the rules and are used to looking into the future. We look at people’s financial situations every day and what money is going to look like down the road.”

Ricks highlighted three key aspects of the OBBBA that may have the broadest implications for individuals and families.

Extension of Tax Cuts and Jobs Act (TCJA)

Ricks said the OBBBA permanently extends this act, which was previously set to expire at the end of 2025.

“Congress basically kept President Trump’s tax cuts from his first term in place,” Ricks said. “That’s giant. For years, the discussion has been that taxes were set to go up significantly unless there was a President and a Congress that would extend the TCJA.”

Ricks said that individuals and financial advisors now have better clarity on planning for the future.

“For example, you can leave your IRA to your spouse and you aren’t required to spend it. But, when the spouse dies, it’s left to a non-spouse beneficiary. That requires the money to spent down by year 10,” Ricks said. “That’s just one example of how we can apply the TCJA in planning scenarios. We know where taxes are going to be.”

Savings Accounts for Children

The OBBBA created tax-advantage savings accounts for children born between December 21, 2024 and 2029.

“What I like about it is that the government is going to contribute $1,000 and parents can contribute up to $5,000 annually,” Ricks said. “Funds must be invested in a diversified index fund and no withdrawals are allowed until the child reaches age 18.”

Once the child turns 18, Ricks said the account becomes similar to a standard IRA. Earnings will continue to grow tax-deferred and qualified withdrawals will be taxed as long-term capital gains. Pre-retirement withdrawals are allowed for certain expenses, like education and the purchase of a home.

“It’s a cool account that could be a retirement account. It can be a college fund. It can help kids buy their first home,” Ricks said. “That’s kind of always the American Dream – saving money. It allows parents to contribute to it.”

Ricks said the accounts also give parents flexibility. If they cannot afford to put away $5,000 per year, they can put away a smaller amount that will still reap rewards for years to come.

“This is what we mean we talk about the magic of compounding. These accounts allow that to start from the time a child is born,” he said. “That’s an extra 20 years of compounding.”

No Tax on Tips or Overtime

This portion of the OBBBA may impact everyone from students who are working in food service or hospitality to older adults who are working side jobs to try to save more for retirement.

The bill created temporary deductions on tips up to $25,000 and overtime income up to $12,500 for single filers ($25,000 for joint filers) for eligible taxpayers. Deductions are for tax years 2025 through 2028 and phase out for those with annual incomes over $150,000 for single filers and $300,000 for married couples filing jointly.

“These tax breaks can help people to work overtime and put in more effort because they may get to keep some,” Ricks said. “The no-tax-on-tips helps, and people are able to save and accumulate money. They can also save for retirement and know what the future reasonably looks like from a tax standpoint.”

Ricks said other notable aspects of the OBBBA include:

• A permanent increase to the estate and lifetime gift tax exemption to an inflation-indexed $15 million for single filers and $30 million for joint filers, beginning in 2026.
• The $750,000 principal limit on the home mortgage interest deduction is now permanent.
• For tax years 2025 through 2028, up to $10,000 in interest on a new car loan can be deducted. The vehicle must be purchased after 2024, and final assembly must take place in the United States.
• Individuals age 65 and older can now claim an additional $6,000 deduction for tax years 2025 through 2028. This deduction phases out for those with a modified adjusted gross income exceeding $75,000, or $150,000 for joint filers.

The broad scope of the bill means that portions of it will very likely affect most Americans, whether they are young college students working part-time, new parents or seasoned professionals with an eye toward retirement. Regardless of someone’s position in life, Ricks said it is always a good idea to work with a financial advisor to help establish a stable future.

“If you are puzzled, thinking about making a change or struggling with some life decisions, run it by the advisor. We develop relationships with our clients,” Ricks said. “We get to know the client and their family well. It’s great to have a relationship with somebody that you can use as a sounding board.”

Visit gregoryricks.com to learn more or schedule a consultation.

Disclosure: This article is meant to be general and is not investment or financial advice or a recommendation of any kind. For more detailed information, contact a financial advisor with Gregory Ricks & Associates, LLC. offering investment advisory products and services through AE Wealth Management, LLC. Insurance products are offered through the insurance business Gregory Ricks & Associates, LLC. AEWM does not offer insurance products. The insurance products offered by Gregory Ricks & Associates, LLC. are not subject to Investment Adviser requirements. Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier. This article is a paid placement. 3239194 – 8/25