One Big Beautiful Bill Act: Tax Rates
The One Big Beautiful Bill Act was signed into law by President Trump on July 4, 2025. The new legislation provides ample opportunities for tax payers and investors, which of course will vary depending upon an individual’s personal, financial planning and tax circumstances.
Impacting a large number of people is the extension of the Tax Cuts and Jobs Act of 2017 tax rates, which were otherwise scheduled to sunset at the end of 2025. Conversations that we’ve been having with our clients depend upon their taxable income levels, regardless of whether they are earning income, retired, or somewhere in-between. For clients with higher income, we now have the comfort of knowing that tax rates for the foreseeable future will stay the same, indexed for inflation. This means that opportunities for Roth conversions can be considered into the future, if and when their taxable income may be lower than it is now. High income earners may also wish to seek opportunities to smooth out their income over time. Easy strategies can include maximizing deductible contributions to retirement accounts and/or H S A’s, if one is eligible. Deferring the income tax through strategically timed withdrawals can take advantage of lower tax brackets in the future. Conversions can also be timed to use all of the opportunity one has in future lower tax brackets over several years. It is important to remember all of the contributors to taxable income, and it is always advised to check in with your tax professional.
Many people breathed a sigh of planning relief when learning of the OBBBA’s permanent extension of income tax rates.
LouAnn Schulfer of Schulfer & Associates, LLC Wealth Management can be reached at (715) 343-9600 or louann.schulfer@lpl.com TheWealthInformationLady.com SchulferAndAssociates.com
Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
