How the One Big Beautiful Bill Could Affect Your Wallet (2025 Preview)

Note: The One Big Beautiful Bill Act of 2025 has passed the House but is not yet law. This article reflects the House-approved version and is meant to help individuals prepare for possible changes.

Lower Taxes, Bigger Credits, and What You Should Know While It’s Still in Debate

I’ve been doing taxes here in Houston for over a decade. One thing I’ve learned is that people don’t want complicated explanations. They want to know what hits their wallet and when. The House version of the One Big Beautiful Bill includes some real changes that could put money back in your pocket.

The bill is still working through the Senate, but you don’t have to wait until it’s finalized to start thinking strategically. I see families every week who wish they’d planned ahead. Let me walk you through what this could actually mean for you.

Lower Tax Rates Could Stick Around

The low tax rates from the 2017 Tax Cuts and Jobs Act were supposed to sunset in 2025. If this bill passes, those rates stay. That means your standard deduction stays at $14,000 for individuals and $28,000 for married couples filing jointly.

For a family in The Woodlands or Katy making $65,000 a year, that’s real money staying in your account instead of going to IRS. I’ve run the math on dozens of returns. The difference between a $13,500 and $14,000 standard deduction adds up over time.

Here’s what I tell my clients: Pull your 2024 return and look at your effective tax rate. Are you paying more under the old brackets? Start adjusting your W-4 now. Don’t wait for April to find out you underpaid.

Child Tax Credit Raised to $2,500 Per Child

Right now, you get $2,000 per qualifying child. This bill bumps it to $2,500 through 2028. If you’ve got three kids, that’s $1,500 additional credit per year.

I had a Pearland couple in my office last month with two children. One of them asked me straight up: “Can we use this to pay down debt?” The answer is yes. That $5,000 credit hit their account in the form of a larger refund, which they put toward their mortgage.

Make sure your dependents are listed correctly on your return and that your income still qualifies for the full credit. Don’t leave $2,500 on the table because you assumed you didn’t qualify.

Tips and Overtime Pay Could Be Tax-Free (Temporarily)

This is the one that’s getting the most conversation at the coffee shops around here. The bill proposes excluding tips and overtime from federal income tax through 2028.

If you drive for Uber or Lyft, work at one of the restaurants in Midtown, run a trade business, or pick up overtime at your main job, this matters to you. There will be income limits (we don’t know the exact numbers yet), but this could be significant for Houston’s workforce.

Start tracking your tips and overtime now in a separate folder. Keep your pay stubs organized. If this passes, you’ll need clean records to claim it correctly. I’ve seen people lose money because they couldn’t document what they actually earned.

$1,000 “Trump Accounts” for Newborns

The bill would fund a $1,000 savings account for every child born between 2024 and 2028. You can use it for education or a first-time home purchase.

It’s not life-changing money, but it plants a seed. I’ve got clients in Houston Heights using 529 plans alongside this kind of account. By the time their kid is 18, they’ve got $20,000 set aside for college. That covers a year at University of Houston without loans.

If you’re expecting a baby, ask us about combining this with a 529. We can show you how to maximize it.

$4,000 Social Security Deduction for Seniors

If you’re 65 or older, this proposal gives you a $4,000 deduction against your Social Security income. That’s straight off your taxable income, starting in 2025.

I’ve worked with retirees in Memorial and elsewhere who were getting hit because they also had pension income or part-time work. A retired teacher getting a pension and Social Security was paying tax on 85 percent of her benefits. This $4,000 deduction helps.

If you’re thinking about when to claim Social Security or how to structure your retirement, this matters. Call us before you make that decision. The difference between claiming at 62 versus 67 is tens of thousands of dollars over your lifetime.

Medicaid Work Requirements Could Impact Coverage

Starting at the end of 2026, adults aged 18 to 65 without dependents need to work or volunteer 20 hours per week to stay on Medicaid. Texas will determine how this works on our end.

If you’re between jobs, doing gig work, or managing health issues, this hits close to home. I know people in our community who’ve relied on Medicaid while they transition careers or recover from setbacks.

Watch your mail and the state website. If you rely on Medicaid, document your work or volunteer hours. Some people qualify for exemptions, and you need to know if you do.

What’s Going Away: Some Credits and Subsidies

The bill cuts some tax credits for home energy, solar, and electric vehicles. If you’ve been thinking about solar panels on your house in Sugar Land or upgrading to an EV, the government incentive might be smaller or gone after this passes.

I had a client planning to spend $12,000 on solar this fall. The current credit could save them $3,600. Next year, that credit might not exist. Don’t sit on this if it’s already in your budget.

If you qualify for these credits now, move ahead. Finalize it before the rules change. That’s the difference between saving thousands or saving nothing.

Final Thoughts: Smart Planning Starts Before the Law Changes

Whether this bill becomes law or not, the direction is clear. Tax relief is on the table, but so are stricter qualification rules.

Here’s what I do for my Houston clients: We plan for two scenarios. We look at your taxes under current law and under the proposed law. Then we make decisions that work either way. That’s not complicated. It’s just smart.

Call me. We’ll review your return, talk through your situation, and make sure you’re ready. That’s what I’m here for.

Schedule your consultation with EZQ Group today.