President Donald Trump’s so-called “Big, Beautiful” tax plan has passed in the House of Representatives. While the bill is still making its way through Congress, its potential impact on individuals and businesses is already sparking debate and uncertainty. As the best CPA firm in the Central Valley for over 80 years, DeMera DeMera Cameron can help you understand the proposed changes to help residents prepare for what’s ahead.
An Overview of the “Big, Beautiful” Tax Plan
Trump’s tax plan builds on the 2017 Tax Cuts and Jobs Act, aiming to extend key provisions while introducing new deductions and credits. Some of the major elements include:
- Extending current income tax rates, which were previously set to expire.
- Raising the SALT (State and Local Tax) deduction cap to $40,000 for most taxpayers.
- Eliminating taxes on tips and overtime pay, a provision that could benefit service industry workers.
- Creating “Trump Accounts”—tax-deferred savings accounts for children.
While these changes may offer relief to some taxpayers, others could face new challenges.
Key Ways It Could Impact Central Valley Residents
Reduced Credits and Deductions for Individuals: Some deductions and credits may be scaled back, particularly for lower-income earners. The plan does not include eliminating taxes on Social Security benefits, despite previous discussions.
More Benefits for High Earners: The proposal maintains tax cuts for high-income earners and corporations, which could widen income disparities.
Potential Strain on Social Programs: The bill includes deep cuts to Medicaid and administrative funding, raising concerns about long-term funding for Social Security and Medicare.
Challenges for Small Businesses: Entrepreneurs and sole proprietors may face new tax hurdles, particularly with changes to deductions and credits that impact business expenses.
Surprising Elements of the Tax Plan
While Republicans largely support the bill, some lawmakers are pushing back on provisions like the SALT deduction cap, which disproportionately affects residents in high-tax states like California. Some elements of the bill, such as the proposed tax-deferred savings accounts for children, raise questions about feasibility and implementation.
Who Will This Hurt the Most?
Lower-Income Households: With fewer deductions and credits available, lower-income households may see higher tax burdens.
Seniors: While the bill increases the standard deduction for older Americans, it does not eliminate taxes on Social Security benefits, leaving many retirees concerned.
Freelancers and Sole Proprietors: Independent workers may face uncertainty regarding deductions and tax structures, making proactive planning essential.
What to Watch for in 2025
To remain informed, you should watch out for the timeline of when these “Big Beautiful” changes could hit the economy and be ready to make financially educated decisions. Trump has expressed a desire to sign the bill into law by July 4, 2025, meaning changes could take effect as early as this tax year. However, as the bill reaches the Senate, potential revisions may occur. Senate Republicans are expected to propose amendments, particularly regarding the SALT deduction and business tax breaks.
Why Proactive Tax Planning Matters More Than Ever
With major tax shifts on the horizon, individuals and businesses must prepare for potential changes. DeMera DeMera Cameron can provide expert guidance to help clients optimize deductions, minimize liabilities, and stay ahead of evolving tax laws.
For a Fresno team stacked with financial experts, contact DeMera DeMera Cameron to guide you through these new economic conditions.
