On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill into law. This new law is a huge group of laws that will affect your family’s finances beginning next year. Other aspects of the Big Beautiful Bill will go into effect between 2027 and 2029. I decided to research this bill further and look at certain sections that would affect everyday families’ finances. This bill covers everything from Medicaid coverage to tax reform, and I’ll explain them as simply as possible. Here is how the Big Beautiful Bill will affect your wallet.
How It Affects Your Taxes
Under the Big Beautiful Bill, the tax cuts that President Trump originally signed into law in 2017 remains in effect. There will be no taxes on tips for the 2025-2026 tax season. The Child Tax Credit increases to $2,200 next year, and this change is permanent. However, those seeking this tax credit must have a valid Social Security number. Families in mixed immigration households cannot get the Child Tax Credit. There will also be no taxes on overtime pay between the years 2025-2028. There will be no taxes on the interest on car loans for new cars. You can deduct up to $10,000 on car loan interest between the years 2025 and 2028.
Those with electric vehicles will lose tax credits after September, and homeowners who have solar panels will lose tax credits for energy-efficient upgrades to their homes such as solar panels and home weatherization projects.
If you live abroad, these new tax laws affect you. Expatriates will still be able to use the Foreign Tax Credit, but they will need to pay up to a 20% tax on their income earned in the new country they live in if that country has unfair tax practices.
The standard deductions you can take are up to $15,750 for individuals and up to $31,500 for married joint taxpayers. The Big Beautiful Bill also eliminates deductions you can take on moving expenses unless you’re in the military.
Medicaid and SNAP Benefits Recipients Will Have Stricter Requirements
Medicaid and SNAP benefit recipients will face stricter requirements under the Big Beautiful Bill. There will be massive cuts in the federal funding of Medicaid, and the bulk of the funding will now fall on the states. Current and future Medicaid recipients must prove that they’re working, volunteering, or attending school at least 80 hours a month to qualify for benefits starting in 2027. It could affect rural hospitals in a negative way because a huge part of their revenue comes from Medicaid. Now that Medicaid funding has been slashed, some rural hospitals may close permanently. Exemptions to the new Medicaid work requirements are disabled persons, pregnant women, and parents with children under age 14. States will also be required to conduct verification checks every six months. States can now require a co-payment from Medicaid recipients whose income is above the poverty line.
Now let’s discuss the new law’s effects on SNAP benefits. Currently, the age at which the mandatory work requirement ended was age 54. Now that age is raised to age 64. The new law also requires parents with children over age 14 to work 80 hours a month. Previously, this was for parents with children ages 18 and under.
Effects on Student Loans and Repayment
Student loan borrowers won’t have many repayment options under the Big Beautiful Bill. Going forward, the federal government will eliminate repayment plans such as the SAVE plan, PAYE plan, and existing income-driven repayment plans. New student loan borrowers will only have two repayment plans: the standard repayment plan and the repayment assistance plan. The standard repayment plan is a fixed amount based on the amount you owe, which could be up to 25 years. Under the repayment assistance plan, borrowers must make a minimum monthly payment of $10, although they may be required to pay more based on their income. Current borrowers will have a transition period until 2028, when they’ll need to choose one of the new repayment plans.
No More Free Tax Filing Through IRS’s Direct File Program
If you used the IRS’s Direct File program to file your taxes for free, you’ll no longer be able to do so for the next tax season. This is because the Big Beautiful Bill eliminates this service. So, going forward, you’ll need to use regular tax preparation companies such as TurboTax, H&R Block, and Jackson Hewitt.
Tax Relief for Seniors
Seniors age 65 and over can claim a bonus deduction on their taxes of up to $6000 from 2025 to 2028. This bonus deduction will be for individual seniors earning up to $75,000, and couples earning up to $150,000 annually.
Expanded Benefits For 529 Plan
Families using the 529 savings plan for their children will see more ways to use these funds under the Big Beautiful Bill. Currently, families can use 529 plan funds to pay for K-12 private school education. Under the new law, homeschooling families can now use these funds to cover expenses such a as:
- Curriculum
- Online education programs
- Standardized test fees
- Tutoring
- Costs of dual enrollment college courses
- Speech or occupational therapy
How Can Families Prepare for These Changes?
Now that you’re aware of some of the new changes under the Big Beautiful Bill, you’ll want to take steps to build a solid financial future in light of these new changes.
If you’re a current Medicaid recipient, be prepared for more frequent eligibility checks from your state government. It’s also a good idea to check your state’s income requirements for continuing these benefits. In addition, you’ll also need to prove that you’re working 80 hours a month in order to keep receiving Medicaid benefits. If you’re a SNAP benefits recipient, this would be a good time to get creative and seek other ways to find work or start a profitable business so that you won’t rely on the SNAP benefits forever. If you think you may lose your Medicaid benefits or recently lost them, you can purchase health insurance from your employer or visit the federal government’s health insurance marketplace for an affordable plan that suits your needs and budget.
If you’re a future or current student loan borrower, here are some actions to take. Contact your student loan provider or visit www.studentaid.gov to find out your loan balance and if you’re in default on your loans. If you’re in default, the federal government has the authority to garnish your wages, seize your tax refunds, and even take a portion of your Social Security benefits to collect student loan paynents. If, like me, you’re enrolled in the SAVE plan, know that you won’t have this option in the future under the new law. Your debt will be in administrative forbearance during the transition period until 2028. In that year, you’ll need to choose a new plan. Adjust your budget and build your savings now so you’ll be ready when repayments begin.
For future student loan borrowers, you’ll only have two repayment options after July 2026: the standard repayment plan and repayment plan. Beginning in July 2026, undergraduate students won’t be able to get a subsidized loan, and Direct PLUS loans will no longer be available to graduate and professional students.
Finally, work toward paying other debts such as credit card debt and personal loans. Create a new monthly budget to prepare for rising costs of living. Look for ways to increase your income and adopt a healthier lifestyle to curb healthcare costs in light of Medicaid cuts.
The “One Big Beautiful Bill Act” marks a significant shift in the financial landscape for everyday families. While some provisions offer potential relief, particularly in certain tax areas, it’s clear that the changes to vital programs like Medicaid and SNAP, alongside shifts in energy policy,requires careful planning and adaptation for many.
Ultimately, by staying informed, adapting where necessary, and leaning on trusted resources and each other, families can work towards navigating these financial currents with greater confidence and maintain a focus on what truly matters: the well-being and future of their loved ones.