One Big Beautiful Bill Act of 2025 OBBBA

Um Welcome to Finishing Well, brought to you by CardinalGuide.com with certified financial planner Hans Scheil, best-selling author and financial planner, helping families finish well for over 40 years. On Finishing Well, we'll examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Social Security, Medicare, IRAs, long-term care, life insurance, investments, and taxes.

Now, let's get started with Finishing Well.

Well, welcome to Finishing Well, a certified financial planner. And we, oh my goodness, what a great show, and what a great title. One. big beautiful bill act.

Now that it's been enacted by Congress. It's a one big beautiful act of 2025. And You know, for many of us, this is such a blessing. It's incredible. Certainly, that the tax increases a lot of people were concerned about aren't going to happen.

And so, with all that in mind, you know, it's clear to me that what happened to Abraham as he received so much wealth in the book of Genesis is God informed him that he was blessed so that he could be a blessing. And maybe you've heard this. you know, said i in Christian circles, but I love it, that if God knows he can get it through you, in other words, that you will bless others, then he he will get it to you. And and you put that together by saying, If God knows that he will get it through you, he will get it to you. And and so apparently he knew a lot of us.

With this bill, you know, he was going to get it to us. And, you know, we have this opportunity now through especially those of us who are 65 who might qualify for the $6,000 tax credit or the new charitable deduction stuff that's going to happen next year for 2026. We're going to talk about all those things. But as we honor God with our wealth, as it says in Proverbs 3, 9, and 10, if we honor God with our wealth, then He will fill our barns. Right?

And that's what it's saying: that now that we get this, we get to do some planning around that. And so, with all that said, Hans? Yeah, I just I love the way you put that. If he can get it through you, he's going to get it to you. It certainly worked out for me.

Yeah, that Put um the big places, you you you better do well with your money, you better be a good steward. and use it to to a good end.

So we're going to talk about this one big beautiful bill. Act. of 2025 and we're going to go through 12 points in it. And if you go watch the video, behind the video is a handout. Chart that gives you a little more information that we're going to do on the radio, but we're just going to go into this real quick.

So The biggest reason for the passing of this was to extend the tax cuts that started back in 2018.

So those had a sunset in them.

So they started in 2018. They ended at the end of 2025. We've been working for years thinking that these lowered taxes that we had for eight years. are going to go back up in 2026. And this bill left them where they are.

So it's not really a tax cut. It's a tax. cut continuation, let's put it that way. But anyway you shake it, I love it.

So Um And the brackets keep extending for inflation They use the word permanent. permanently the reduced federal income tax rates, but permanently means until they raise them the next time.

So Um at least in my book.

So, and the importance of that is we can go on doing things, Roth conversions. I mean, we got tax rates for many people in the 20s. Yeah, and some in the teens. And you can do a lot with if you can keep 80%, 85% of your money. Oh man.

Yeah. And You know, it it it really It just seemed like it was really being debated, but it was such a beautiful thing. that Congress came through on this and a special blessing for people over 65, right? Oh, it did.

So let's jump on to the next one is the estate. Tax. and gift tax exemption you know, isn't really relevant for most people. But it was a About fourteen million this year. per person.

and it was going to go and cut in half. In 2026, as part of that 2018 thing. And they extended it where it's 15 million a person. And you know, people say, oh, I don't care about the rich people.

Well, a lot of some of these rich people may own small businesses. in their family. And farms and uh maybe radio stations and that kind of thing and they're right around those numbers and you know, they really can't lay their hands on the money, but when somebody dies, Um all of a sudden the IRS owns you know, a good portion of their business.

So This is a good thing that they put an exemption In there, where people can have substantial wealth that can pass to the next generation. you know in a business and not face estate taxes. And it still hits the billionaires. This is kind of a drop in the bucket to them. Another good thing, check mark.

Uh move on. Um The next one, the twenty percent qualified business income deduction. made permanent Expanded income limits. And if I go up to people on the street and ask them to explain the 20% qualified business. income deduction to me Uh there's very few people out of a hundred that could even know what I'm talking about.

But You know, what it amounts to is is in the tax cut and jobs cut the tax cut and jobs act. But went in effect in 2018, 2017. They Lowered Corporate income tax is down to 21%. And They So corporations' earnings get taxed twice. Is that first time at the corporate level, and then they get taxed again.

when they distribute their dividends and the people that own the stock. Um it again as income.

So If you own a partnership or a Sub chapter S Corporation. Like I do. Um you're able to take a deduction So that you get the benefit of that corporate Um lowering of the income tax. It's a little complicated, but let's just leave it at that. They took care of the small business people.

who have a way around corporate income taxes. Um they gave them an extra deduction or they made it permanent. Um Next one. The standard deduction increased immediately.

So this is for 2025. Yes. you used to get as a single a $15,000. standard deduction. Um But after they passed the big beautiful bill, that went to 15,000.

Yeah. So there's a slight increase that if you're married filing jointly, That's 31,500. of a standard deduction as as opposed to itemizing. And if you're 65 plus. The single you get an additional $2,000.

So it's 17,750. And if you're married filing jointly, you get... an additional thirty two hundred dollars or thirty four thousand seven hundred dollars. Just of you just write that on your tax return whether you have the deductions or not.

So The impact of that is gigantic. Um What do you have to say to that, Robbie? Oh, absolutely. And I remember when they came out with the original bill you're talking about that just got extended. This idea of the giant standard deduction.

made everybody's life so much simpler. Like I didn't have to sit there with all these receipts and figure out where I'd given money to this, that, and the other, or where I'd paid taxes, I mean interest or any of that stuff, you know. Hospital bills and all those, oh my goodness, those who used to itemize their deductions know exactly what I'm talking about. When they came with this, all of a sudden, not only was it simpler, but you're paying a whole lot less tax. And You know, it it It was huge.

Well, now they've made it even bigger.

So it's, you know, like you say, it's a win-win deal. They were clearly wanting to take care of the seniors here. And they want you to vote for them next time. Um all of them. Mm-hmm.

You can't really do that 'cause this was a bipartisan thing, but Um So in addition They came out with a $6,000 senior deduction, which by the way starts this year. Yeah, in 2025. $6,000 a person.

So if you're a couple and you're both over $65,000, it's $12,000. Um starts immediately so You're going to get the advantage of that on this year's tax return. And this provision has a sunset on it. where it only goes through twenty twenty eight.

So Um that was part of a compromise.

So maybe they'll extend it at the end of 2028, but we're going to enjoy it while it's here. But the idea of that brings just to pause there for a minute because I love that one so much. But not 'Cause, you know, for the average married couple like us, it's $12,000, right? And and what they had said in the campaign promises, from my perspective, was we're not going to tax you on your Social Security. Right.

And this is kind of where that's coming in, is that for people on Social Security that are still working, and there's a whole lot of us now that are like that, we're paying tax on our Social Security as income. And this helped offset that. Again, with the idea being to me, it's genius because The taxes that will still be paid on Social Security. outside of this deduction will still help fund Social Security, which is where everybody's concern is, is that Social Security is going to run out of money. I don't have that concern huge, but it's out there, and this doesn't affect that.

I just thought it was really a great idea. A really great idea the way they structured it, right?

Well, it is. And the only way they could deliver on that campaign project was to come up with a deduction, and they did put a cap on it.

So Uh up to 75,000. of adjusted gross income if you're single. And if you're a married couple, $150,000.

So if you're over 150, This is going to phase out. It's not going to go away. immediately But I don't want to get into the details of that. But as long as you're under those numbers. You can just add this 6,000.

To the 34,700.

So now you're up over 40 grand of deductions. that you just put on your return without proving any of them. Uh it's just wonderful.

So And the whole idea is when you're retired and you're a senior and you're Living on What is still a nice income, but you're You're not paying out a lot in taxes. And and that's the way it's supposed to be.

So Um Next up is this salt thing, and this is probably one of the most misunderstood things. that you could ever first of all the only way you're going to benefit from salt which SALT stands for state and local tax. Is to be an itemizer.

So we've just given you the standard deductions, and most people in America. itemize don't itemize, they just take the standard deduction. But if you itemize You've been limited. to ten thousand dollars for state and local tax.

So Um I don't itemize. But if I did. I pay more than ten thousand a year in state and local tax. Right, well this would be a good time right here. to remind you that This show is brought to you by Cardinal Guide.

CardinalGuide.com is where Hans's website is, CardinalGuide.com. There you'll have the seven worries tabs, which one of those Worries is taxes.

So, this is really going to be found there. If you click on that link, you're going to find a wonderful video that goes through great detail on all 12 of these, as well as show notes and actually the forms from the IRS is putting out and all that.

Some really cool stuff with Tom. It's again, they've got the exact same. you know, name the one big beautiful bill. Act of 2025. as well as of course Hans's book and workbook, The Complete Cardinal Guide to Planning Foreign Living in Retirement, and the all-famous contact Hans and Tom page.

So we're gonna be right back with a whole lot more. One big, beautiful bill. We'll be right back. Investment advisory services offered through Brookstone Capital Management LLC, abbreviated BCM. a registered investment advisor.

BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. Welcome back to Finishing Well with Certified Financial Planner Hans Scheil and today's show. I love it.

One big beautiful bill act. Since it's now been enacted of 2025, and a beautiful thing is on most of these things, this stuff is in effect on this tax year.

So when we do our tax returns, with the exception of the Charity stuff, which we're going to get to in a minute. Most of what we talked about today is already in effect in Kaching, right? It is?

So The next piece is, you know, I I just want to state something. The tax writers Have been very cautious because one thing they get accused of: oh, all this stuff is for rich people. Yeah. They they took great caution. to limit the benefits of this thing.

from the very well-to-do. not eliminate them, but to limit the benefits really has an answer to that accusation. And so I mean clearly the reduced federal brackets or the continuation of the reduced federal brackets. are going to help very well-to-do people and will help.

So they're benefiting from this bill. But all these add-on provisions Not all of them, but most of them. The limit Um The very well-to-do.

However, you want to define that. And this one here that I'm going to bring up. There's reduction of itemized deductions. It starts in twenty twenty six. And it's for those in the 37% tax bracket.

So the 37% is the highest bracket there is. And it's like everything over like seven hundred grand for a married couple or something like that. But people that make huge money, millions. They're paying 30 for 7%. On the on most of the top end of their money.

Besides the state income tax, And so what they've done is they've reduced the value of their itemized deduction.

So we're not going to spend a lot of time on that. other than to just acknowledge it. that they're going to have a reduction in itemized deductions.

Now Moving on to the charitable charitable deduction. for non-itemizers. And it starts in 2026. and it's a thousand dollars a year for a single $2,000 for a married filing joint. Yeah.

This was a great thing that they put in there. And I'm going to tell you why. Here's Donations to charities are down Pean, I don't know if all of this can be attributed to tax. considerations but some of it is is just the fact that they give you a big standard deduction. And they give you credit for Um giving whether you do or not.

Um That has hurt charities. And so Thank you. put back in, you still got the standard deduction, but now You can deduct $1,000 if you're single. $2,000 if you're married filing joint. I mean, you have to make the contributions.

And you have to be able to prove them. But you can put down money separately. This is out of the it's for non-itemizers. That makes sense? Yeah, exactly.

Yeah. Um So just I'm going to increase my giving. Um Oh yeah, for a lot of us take advantage of this. Right. Even if you don't.

You know, many, many of us, we've been giving, giving, giving, and it didn't affect our taxes at all. But now, I mean, in twenty twenty six, keep your receipts, right? Because all of a sudden now it's going to matter again and um you can add it in And again, for things like our 501c3, the Jesus Labor Love. Clearly, this is a great, great benefit for us. It's great.

Now tax deduction for tips That was another campaign promise. And it's reality. And it starts immediately in 2025. It sunsets in 2028.

So they're going to have to extend it if it's going to keep on going. But that's still four years. and the maximum deduction is twenty five thousand dollars. And it's the same whether you're single or married.

So if one of you receives tips or both of you receives tips, 25 grand. And it has a phase out. of one hundred and fifty thousand For a single person Yeah. and a three hundred thousand for a married couple.

So those are pretty high phase-out limits. But uh you know, the waitress that Burn ten thousand dollars of her forty thousand dollars Um our tips. Um she's going to be able to where he's going to be able to wait or to um not pay taxes on that ten thousand dollars that was tips. Which is a nice thing. Really?

Um gonna help some working folks. Tax deduction for overtime.

So people that Work overtime, and there's a bunch of rules. It's got to be real overtime. I mean, it can't be. Just Well, you know, just let's not get into the rules. It has to legitimately be overtime.

And this again is 2025 to 2028.

So it has a phase out, it'll have to be. Um extend it if they're going to keep it. And this is a maximum of $12,500 for a single person. and 25,000 for a married couple. Um so these people that work at a job And they work a lot of overtime.

Um you know, like car salesmen, I g I would guess. That uh I don't know if they pay you for overtime though as a car. I'll tell you where it works out f in a in a practical sense. My daughter is a nurse. And nurses get it a phenomenal car salesmen don't usually get make overtime, but Nurses get a phenomenal amount of overtime and it's tough time, right?

Because over Christmas or wherever it is. But interestingly, so I'm curious, like where her husband works in a actually manages a production company. Um So with the The fact that they're married give her a larger amount on hers or they just It has 25,000.

Okay. Whole 25,000 can be on hers. That's just a maximum. For the couple. Right.

Okay. And they have a phase-out is if they make more than 300 grand. between the two of them, then then they're gonna lose some of this. if she was still single, it would make more than one hundred and fifty thousand. then she's going to lose some of this over time or all of it.

But it sounds to me like they're going to be just fine on that. Oh yeah, that's gonna be really helpful for her.

So the you know, it's just it's it's helping working people. And that's what they promised to do and That's what this bill does. Child tax credit. it permanently increases to 2200 percent. with inflation increases in the future.

And keep in mind, this is a tax credit, not a tax deduction. It's like real money. You know, if you got My son. or my grandkids. I mean, he's got I got two grandkids.

4,400 bucks. of tax credit that comes right off their tax bill. And that's to help their daycare expenses are just Huge. Right. And they've got an in they've got an income limit of 200 grand.

for an individual. and four hundred grand for a married filing jointly.

So That's if you make a lot of money, you're not going to get this credit, but if you make still good money but not over the top you're going to get a tax deduction for I mean a tax credit. It's more than a deduction for each kit. Yeah, and the same thing with my granddaughter. And my daughter and my granddaughter. That it's working people, right?

They she's a she's a teacher, my other daughter, and so she has my granddaughter in childcare, and that stuff's expensive. But it's so she can work. And so I love the fact that so many of these things are aimed at getting people to work. Sure. If the teenagers count too.

Um So But anyhow. Um it's it's it's going to be helpful to working families.

So In the last section, these Trump accounts And we've been studying these. We're going to do a show here coming up on them. Yeah. Um The the biggest thing with the Trump accounts is that babies born In 2025 to 2028, we'll be seated. with a thousand dollars from the government.

I mean, I think you got to open the account and put some money in there to get the thousand bucks. I don't think you're just they're going to open an account for every baby born. But you're going to get $1,000 of free money from the government. Yeah. Tom's got a baby on the way and he absolutely intends to open these for all his kids.

He'll have three by the time this one's born and he'll get the thousand bucks. On the newest kid. Um The youngest kid. The end. Um There's a maximum that you can put in here of $5,000.

her child, and that can come from Parents. employers and others like grandparents.

So I may well open these things. at some amount on my grandkids. Um I don't I'm not sure how these stack up yet. against 529 plans. because a lot of people are doing this for education.

And so you can just wait for my upcoming show. Yeah, in Tom's case, he's going to do both. Yeah, I may very well do both. But there's different tax implications. But it's a sweet thing.

Yeah, and I love the thing about, you know, with a five twenty nine You you've got to spend the money on education to get the tax deferred benefit, which these are going to have a tax deferred benefit, but they don't necessarily have to be spent on education, is my understanding right? That's correct. And so that's a pretty cool deal, right, that you can begin to think about other ways. And then that's what we talked about, honoring God with your wealth to the next generation of finding ways the government's going to help you To pass money on to the resources to keep the kingdom going for generations. And so, again, we got to remind you that this show is brought to you by Cardinal Guide, CardinalGuide.com.

And there, if you've looked, there's got seven worries tabs. It's kind of their menu items. And when you look at one of those, is taxes. And so this one big, beautiful bill is also a video. And if you go look at that video, I mean, they have a board like you wouldn't believe with detailed information and even tax forms and things in the show notes would be so helpful as you begin to process how to plan for what God has provided here in the United States of America through this one big, beautiful bill.

And it's all there at cardinalguide.com, as well as Hans's book, The Complete Cardinal Guide to Planning for and Living in Retirement. And there's a beautiful workbook that goes with that. And of course, the contact Hans and Tom page. If you've got specific information that you're hoping to get from them, they would love to hear. From you.

It's all there at cardinalguy.com. Great show, Hans. Yeah, thank you, and God bless you. The opinions expressed by Hans Scheil and guests on this show are their own and do not reflect the opinions of this radio station. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such.

Any statements or opinions are subject to change without notice. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you.

Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it's suitable for your specific situation. Finishing Well is designed to provide accurate and authoritative information with regard to the subject covered. Investment advisory services offered through Brookstrone Capital Management LL. Abbreviated BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other.

Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. We hope you enjoyed Finishing Well, brought to you by CardinalGuide.com. Visit CardinalGuide.com for free downloads of this show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, investments, and taxes, as well as Han's best-selling book, The Complete Cardinal Guide to Planning for and Living in Retirement and the Workbook. Once again, for dozens of free resources, past shows, or to get Han's book, go to CardinalGuide.com.

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