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By Aliss Higham

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After months of debate and political brinkmanship, a massive new Republican-led One Big Beautiful Bill Act is moving closer to becoming law. The sweeping package touches nearly every corner of American life—from taxes and healthcare to student loans and food assistance.

The bill continues tax cuts from President Trump's first stint in the White House, funds his border wall plan, and increases defense spending. The associated fiscal impact of this is offset by reducing federal support for key components of the social safety net, including food assistance and health coverage programs.

Its scale is matched only by its controversy. Democrats are firmly opposed to it, and numerous groups have warned it could have a devastating impact on America's neediest, as well as increasing the deficit - much to the chagrin of certain fiscal hawks in the GOP as well.

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Regardless of opinions, the sprawling megabill will impact all Americans. As the House prepares to cast its final vote, here are the most important elements of the bill that may impact your money:

Taxes

The OBBBA is loaded with new tax legislation, with several new tax breaks on the horizon - as well as some eliminations:

• State and Local Taxes (SALT) deduction: Expanded to $40,000, up from $10,000, through to 2029.
• Senior tax break: Those over 65 would receive a $6,000 boost to their standard deduction from 2025 through 2028.
• Overtime income: Allows individuals to deduct up to $12,500 of overtime pay from their taxable income for tax years 2025 through 2028, while couples filing jointly could deduct up to $25,000.
• Tipped income: Allows tipped workers to deduct tip income from their federal taxable income, up to $25,000 annually. A full list of eligible occupations for tip deductions will be released within 90 days of the bill becoming law.
• American-made tax break: If you're buying a new car made in America, you will benefit from an annual $10,000 interest deduction.
• Electric vehicle tax credits: If you're buying a new electric vehicle however, you will no longer be able to get the current $7,500 deduction.
• Boosted Child Tax Credit: Families with children will benefit from a $200 boost to the CTC, bringing it to $2,200. However, there is no boost to the $1,600 refundable portion of the credit, which could mean low-earners will not fully benefit compared to higher earners.
• Estate taxes: The bill will raise the exemption threshold starting in 2026 to $15 million for individuals and $30 million for married couples—up from the current $13.99 million and $27.98 million.

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Healthcare

One of the most talked about elements of the bill has been its impact on Medicaid. Here's how it will change:

• Work requirements:

  • Able-bodied adults ages 19 to 64 enrolled through Medicaid expansion must work, volunteer, attend school, or participate in job training for at least 80 hours per month. Exemption for those with children aged 14 and under.

• Eligibility and cost changes:

  • Expansion enrollees would undergo more frequent eligibility reviews.
  • Enrollees could be required to pay up to $35 for certain types of care.

• Federal funding cuts:

  • States would receive less federal funding for Medicaid.
  • This could lead to states eliminating benefits, tightening enrollment, or making other cost-cutting changes.

• Increased administrative burden:

  • Enrollees may face more paperwork and verification requirements, which could make it harder to apply for or maintain coverage.

Food Assistance

Supplemental Nutrition Assistance Program (SNAP) benefit recipients will also face a slew of changes:

• Work requirements: Similar to Medicaid, able-bodied adults ages 19 to 64 must work, volunteer, attend school, or participate in job training for at least 80 hours per month. Again, there is an exemption for those with children aged 14 and under.
• States facing cost share: For the first time, states with high improper payment rates will be required to start paying a share of benefits, up to 15 percent. Many states have warned this is unaffordable, which could lead to states ending their participation in the program entirely.

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Student Loans

There are some big changes coming for student borrowers. Here's the breakdown:

• Changes to payment plans: Several widely-used repayment plans—the Biden administration's SAVE plan, Income Contingent Repayment, and Pay As You Earn—would be discontinued. They will be replaced by the newly introduced Repayment Assistance Plan (RAP), or the traditional standard repayment option, in July 2026.
• Graduate PLUS loan program will be no more, also effective July 2026. It currently allows graduate and professional students to borrow up to the full cost of attendance. It will be replaced with a cap of $100,000 for most graduate students and $200,000 for those in medical or law programs.
• Parent PLUS loans would also face a borrowing limit of $65,000 and would no longer qualify for any income-driven repayment options.
• No more deferment options for those in financial difficulty, although loan rehabilitation for those who are in default will be permitted twice instead of once.

Trump Accounts

Good news for newborn babies: they'll be getting $1,000 from the federal government.

The so-called "Trump Accounts" will see babies born between January 1, 2025, and December 31, 2028 who are U.S. citizens with parents that have Social Security numbers get a one-time government contribution of $1,000 into a dedicated account. The accounts will track a stock index and allow for additional private contributions of up to $5,000 every year.

The money unlocks at 18 years of age, and according to PBS, can be spent on higher education expenses, small business or small farm expenses, or put toward purchasing a first home.

Other Changes

• End of the Internal Revenue Service Direct File program: Totally free tax filing direct with the IRS under the Biden-administration's program will end. It was initially piloted in 2024, before being expanded to more than two dozen states in 2025.
• Unemployment payments for millionaires: Federal funds cannot be used for unemployment compensation benefits for millionaires.

Will Americans Be Better Off Under Trump's Bill?

This depends on your own personal situation.

Not all of the measures apply to everyone. For example, if you have student debt, collect SNAP benefits, and are on Medicaid, you may end up worse off under the OBBBA. But if you're a hospitality worker hoping to keep more of your own tips, or a couple about to have their first child, you could find your financial situation looking up.

According to analysis by the Yale Budget Lab, this is how the bill will, on average, impact different income brackets, according to the Adjusted Gross Income (AGI):

Lowest earners (AGI under $13,350):

• Average income loss: $600
• Change: –2.5 percent

Lower earners (AGI between $13,350 and $36,475):

• Average income loss: $65
• Change: –0.2 percent

Middle-income earners (AGI between $36,475 and $64,955):

• Average income gain: $720
• Change: +1.4 percent

Upper-middle earners (AGI between $64,955 and $120,390):

• Average income gain: $1,730
• Change: +2.0 percent

High earners (AGI over $120,390):

• Average income gain: $6,495
• Change: +2.4 percent

However, there may be some amendments to come before the House casts its final vote, meaning these estimates could change.

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