4 Surprising Ways Trump’s ‘Big Beautiful Bill’ Can Affect Your Finances

President Trump’s new tax bill is set to change how Americans manage their finances. The House recently approved this bill, which extends the tax cuts from 2017 and modifies various financial programs affecting many citizens.

Aside from tax changes, the bill proposes a significant funding boost for immigration enforcement, amounting to around $150 billion. With the House’s approval, Trump could sign this bill into law soon.

The nonpartisan Congressional Budget Office (CBO) warns that this legislation could add $3.3 trillion to the national deficit. Moody’s Analytics also expressed concerns, suggesting that extending tax cuts could lead to an extra $4 trillion in deficit over the next decade. This could result in higher interest rates for loans and mortgages.

Here are some key aspects of the tax bill:

The bill proposes to eliminate taxes on tips and overtime wages. Most tipped workers earn enough to be taxed, so this change could help them financially. Additionally, seniors earning less than $75,000 would benefit from a $6,000 tax deduction designed to fulfill Trump’s promise to eliminate taxes on Social Security payments.

Moreover, the child tax credit will increase to $2,200, while tax credits for electric vehicles and some renewable energy projects will end after September. A notable change involves raising the state and local tax deduction (SALT) from $10,000 to incrementally higher limits through 2029, benefiting particularly those in high-tax states.

On the student loan front, the bill would modify existing repayment plans. It would replace them with two new options, including a plan that allows loan forgiveness after 360 qualifying payments based on income. This would change the landscape for many borrowers, especially as it seeks to repeal the previous SAVE plan aimed at reducing monthly payments.

Finally, the bill includes a proposed “Trump Account” for newborns, where the government would deposit $1,000 to encourage long-term savings. Parents can contribute up to $5,000 annually until the child turns 18, with favorable tax treatment on withdrawals.

As for assistance programs like Medicaid and SNAP, the bill introduces an 80-hour monthly work requirement for certain recipients. The CBO estimates that this could lead to over 8 million people losing coverage over the next decade due to inability to meet the new requirements. This reflects rising concerns about how such policies could affect the most vulnerable in society.

Overall, these changes underscore a significant shift in fiscal strategy, intertwining immediate financial relief with longer-term impacts on government revenue and citizen support programs. As discussions continue, many Americans will closely monitor how these policies will personally affect their lives.

For more detailed insights, consider visiting the CBO’s findings on these proposals here.

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