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

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.

When tax laws shift, everyday households often feel the impact first, but see the benefits last. The recently passed House version of the One Big Beautiful Bill Act of 2025 includes changes that could affect millions of Americans, including lower tax rates, larger credits, and new rules governing income, benefits, and retirement.

Although the bill is still waiting on Senate approval, it's smart to get informed now. At EZQ Group, we help individuals and families stay one step ahead. Whether or not this becomes law, your financial plan should be built to adapt.

Here's what the proposed legislation could mean for you.

Lower Tax Rates Could Stick Around

The current individual tax brackets from the 2017 Tax Cuts and Jobs Act are set to expire in 2025. This bill proposes maintaining the lower tax rates and retaining the higher standard deduction, currently around $14,000 for individuals and $28,000 for married couples filing jointly.

For most working families, that means less income is taxed and more money is kept.

Planning tip: Take a look at last year's return. Would higher tax brackets or a lower standard deduction change your refund or amount owed? Knowing that now can guide your 2025 decisions.

Child Tax Credit Raised to $2,500 Per Child

The Child Tax Credit would increase from $2,000 to $2,500 per qualifying child through 2028. After that, it would be indexed to inflation.

For parents with young children, that's meaningful help. Whether you work full-time, part-time, or stay home, this credit can be a cornerstone of your tax return.

Planning tip: Make sure your dependents are properly documented in your return and that your income qualifies for the full benefit. EZQ can help you run the numbers ahead of time.

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

One of the most talked-about provisions is a proposal to exclude tips and overtime pay from federal income tax through 2028. While there will likely be annual income limits, this would benefit:

Hospitality workers

Drivers

Tradespeople

Anyone earning through hourly or performance-based compensation.

Planning tip: Start tracking tips and overtime separately now. If the bill passes, you'll want clean records for accurate reporting—and maximum benefit.

$1,000 "Trump Accounts" for Newborns

The bill creates a government-funded savings plan of $1,000 for every child born between 2024 and 2028. These accounts would be restricted to education expenses or a first-time home purchase.

It's a relatively small start, but it could encourage longer-term saving and financial literacy for young families.

Planning tip: Consider pairing this with a 529 Plan or custodial account to create a broader financial future for your child.

$4,000 Social Security Deduction for Seniors

If you're 65 or older, this bill includes a $4,000 deduction on your Social Security income, starting in 2025. That means more seniors could see their taxable income reduced, especially those who also receive a pension or part-time work income.

Planning tip: If you're nearing retirement, this could shape how you time withdrawals or structure your income streams. EZQ offers retirement tax strategy services to help you plan it right.

Medicaid Work Requirements Could Impact Coverage

By the end of 2026, the bill would require adults aged 18–65 without dependents to work or volunteer 20 hours per week to qualify for Medicaid. While some exemptions will apply, this could impact those in transition between jobs or those managing part-time or gig work.

Planning tip: Watch how your state responds. If you rely on Medicaid coverage, you may need to track qualifying activities or seek support adjusting your eligibility.

What's Going Away: Some Credits and Subsidies

The bill reduces federal spending on programs like SNAP and Medicaid, and it rolls back home energy efficiency credits. If you've been planning solar upgrades or electric vehicle purchases, some of the incentives may no longer be available.

Planning tip: If you qualify for these credits today, don't delay. Finalize purchases or installations before legislative deadlines take effect.

Final Thoughts: Smart Planning Starts Before the Law Changes

Even if this bill never passes, its content gives us a clear direction: tax relief will likely stay in focus, but so will stricter qualifications for benefits.

At EZQ Group, we help individuals and families make sense of what's happening—without the stress or guesswork. Whether it's reviewing your W-4, maximizing credits, or preparing for life events like retirement or starting a family, we're here to make sure you stay prepared.

Need help understanding how this bill—or any tax change—could affect you?

Let's review your tax plan, optimize your deductions, and ensure you're ready either way.

Schedule your consultation with EZQ Group today.