What the ‘One Big Beautiful Bill Act’ means for your finances

The new legislation likely has implications for all federal tax-filers in the United States.

The sweeping tax and spending law signed on July 4, dubbed the One Big Beautiful Bill Act, includes key provisions and potential financial planning opportunities for individuals and families.

The scope of the changes emphasizes the value of having a collaborative professional team, in which your trusted financial, tax and accounting advisors work together to consider your unique circumstances.

This listing is by no means comprehensive to the nearly 900-page law, but you can start here to understand the potential impacts of the tax law changes for you and your family.

Key tax items
If you’re still working as a solopreneur, you can actually deduct Medicare Part B and D premiums – even if you don’t itemize. Supplemental Medicare and Medicare Advantage costs are also deductible. But not everyone can deduct – this only applies if you don’t have access to a health plan for your business or through your spouse’s employer or business.

Tax rates and standard deductions
Notably, the law extended the tax cuts from the Tax Cuts and Jobs Act of 2017, which were set to expire at the end of 2025, affecting the 2026 tax year. The lower tax rates, which range from 10% to 37%, are now permanent in that they have no expiration date. Also, standard deductions were increased for the 2025 tax year: $15,750 for single filers and $31,500 for those married filing jointly.

Gift and estate exemptions
Thresholds introduced in the Tax Cuts and Jobs Act were extended and now have no expiration date. The limits had been scheduled to expire at the end of 2025, and reversion to the previously lower thresholds could have had substantial intergenerational wealth implications for families with sizeable estates.

Under the new law, the gift and estate tax exemptions increase from $13.99 million for single filers and $27.98 million for married couples filing jointly in 2025 to $15 million and $30 million, respectively, in 2026.

SALT cap expansion
The law temporarily raised the state and local tax, or SALT, deduction cap to $40,000, with a 1% increase in the cap each year until 2029, before reverting to $10,000 in 2030. The expanded deduction begins to phase out for those with more than $500,000 in modified adjusted gross income, though all taxpayers can claim at least $10,000.

Senior “bonus” deduction
The law added a new deduction for taxpayers over age 65 for each year from 2025-2028. A source of some confusion, this deduction is not tied specifically to Social Security. Rather, it applies to all tax filers 65 and older: $6,000 for single filers and $12,000 for joint filers. This deduction begins to phase out at $75,000 modified adjusted gross income for single filers and $150,000 for joint filers.

Charitable deduction for non-itemizers
The law reintroduced and increased the deduction for qualified charitable contributions even for taxpayers who don’t itemize. Effective in tax years following 2025, individuals can deduct up to $1,000 and joint filers can deduct $2,000. Once it takes effect in 2026, this provision does not expire.

Child Tax Credit
The law permanently increased the credit from $1,000 to $2,200 in 2025. The credit begins to phase out for single filers with modified adjusted gross income above $200,000 and joint filers above $400,000.

Car loan interest
For tax years 2025-2028, up to $10,000 of interest can be deductible, provided the vehicle was assembled in the United States. This deduction is subject to income limits for loans acquired after 2024.

Electric vehicle credits
Eligibility was narrowed.

Tips deduction
From 2025 to 2028, workers in eligible industries can deduct up to $25,000 in tips from taxable wages. This deduction begins to phase out for single filers with modified adjusted gross income above $150,000 and joint filers above $300,000.

Overtime pay deduction
From 2025 to 2028, single filers in eligible industries can deduct up to $12,500 in overtime pay, though the deduction begins to phase out at modified adjusted gross income above $150,000. Joint filers can deduct up to $25,000, with the phase out beginning at $300,000.

Key financial items

529 savings plans
The law expanded the eligible expenses for which 529 funds can be used. Previously, 529 funds for K-12 students could be used primarily for tuition, with an annual limit of $10,000. Expenses such as tutoring, testing fees, dual enrollment, and educational therapy for children with disabilities are now eligible. And the annual amount was increased to $20,000 starting in 2026.

The law also increased student loan payback from $10,000 to $25,000 per beneficiary, allowed for post-secondary credentialling to pursue a trade or designation, and made permanent rollovers from 529 to ABLE accounts.

New savings accounts for children
The law introduced tax-advantaged accounts for minors. While there are no income or earnings requirements, there are restrictions on withdrawals and investment options.

Children born between Jan. 1, 2025, and Dec. 31, 2028, will receive a $1,000 initial government contribution. Annual contributions of up to $5,000 can be made until the child reaches 18.

Withdrawals cannot be made until the year the minor turns 18, at which point the account follows traditional IRA rules. Distributions will be taxed at ordinary rates for earnings, plus a 10% penalty if applicable.

Student loans
Certain borrower-friendly provisions were rolled back.

Next steps
From saving strategies to timing for purchasing a new car, there is much to consider in the new law’s provisions. As you review these takeaways, consider which items could apply to you and your family. You may find your tax bill is smaller – or your refund larger – creating opportunities for strategic saving, spending or charitable giving.

As always, having a plan will help you be most effective.

Changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Launching a financial future

Share these fundamental concepts with young emerging investors.

We celebrate our lives in milestones. Ages and stages. Once we hit that thrilling number 18 signifying that we’re officially adults, the amount of freedom we feel becomes commensurate with the responsibilities that our lives begin to take on – with financial literacy underlying many of those obligations.

Navigating the world of investing can feel daunting, but understanding key concepts and learning from essential lessons can guide the journey. Whether you have a family member turning 18, or someone in your life looking to build wealth from the bottom up, this primer provides a solid overview of the basic types of securities, investing strategies, and valuable lessons to help pave the path toward financial confidence.

Understanding your options

Before launching into the world of investments, emerging investors need to know and understand what tools are at their disposal. Securities are essentially tradable assets that hold monetary value. Each type serves a distinct purpose and carries risks, rewards and trading costs.

• Stocks: Representing ownership in a company, stocks grant investors voting rights and potential dividends (a share of the company's profits). These can be volatile, offering high returns but also carrying the risk of capital loss.
• Bonds: Essentially loans made to companies or governments, bonds offer a fixed interest rate over a set period. While generally less volatile than stocks, they offer lower potential returns and are susceptible to interest rate fluctuations.
• Mutual Funds: These pool investors' money to purchase a diversified portfolio of assets (stocks, bonds, etc.). They offer lower risk and greater liquidity but come with management fees.
• Exchange-Traded Funds (ETFs): Similar to mutual funds, ETFs passively track a market index or sector, offering instant diversification and lower fees. They trade like stocks throughout the day, providing greater flexibility.

Finding your investment strategy

Once new investors understand the tools, it's time to provide clarity on how different investment strategies align with varying risk tolerances and goals. A vital point to make: your investment strategy can change as your needs and goals change.

Some investors focus on value investing, which seeks undervalued stocks with strong fundamentals (core elements of the company itself that make the stock attractive). To succeed with this strategy, it’s important to be patient and interested in researching companies to find those hidden gems with potential for growth.

Another strategy focused on company fundamentals is growth investing. Instead of considering what the company looks like today, this style is mostly concerned with high growth potential. By prioritizing future earnings over current profitability, it carries higher risk but offers the chance for significant returns.

For those investors looking for less growth potential, but a steadier income and capital appreciation over time, dividend investing is a strategy to gravitate toward. It can provide regular income through investing in stocks that pay consistent dividends. It is important to note that dividends are not guaranteed and must be authorized by the company’s board of directors.

Looking at the bigger picture, asset allocation zooms out beyond stocks and invites investors to diversify across different asset classes (think stocks, bonds, etc.). This approach helps mitigate risk and balances volatility while on the road to long-term growth.

Embracing tried-and-true lessons

Investing for beginners can feel daunting, but helping to understand key concepts like risk and return, diversification, and the power of time can set investors on the right path.

You’ve heard these sayings, and now it’s time to pass them on. Stress the importance of not putting all their eggs in one basket – it helps to spread investments across different assets and sectors to manage risk. The earlier aspiring investors start and the longer they invest, the more their money grows thanks to compound interest. It’s also prudent to help them become mindful of fees, do their research, and seek professional guidance when needed.

Remind them that investing is a marathon, not a sprint. Once they embark on their investing journey, they should strive to stay informed and adapt their approach as they work to build a secure financial future.

By sharing the learnings of experienced investors, you can help new investors avoid common pitfalls and succeed in building wealth from the bottom up. Here are some key lessons to impart:

• The power of compounding: When you start early, your money grows over time. Even small contributions invested consistently can snowball into significant sums thanks to compound interest. (A great example of this is a 401(k) retirement plan offered by employers where small amounts are allocated from your pay until you can increase your investment.)
• Risk and reward are inseparable: Higher potential returns come with higher risk. Understand your risk tolerance and invest accordingly.
• Discipline over emotions: Fear and greed are market enemies. Stick to your investment strategy and avoid impulsive decisions based on market fluctuations.
• Do your research: Know what you're investing in. Research companies, understand their financials, and critically evaluate investment advice.
• Embrace diversification: Don't put all your eggs in one basket. Spread your investments across different asset classes and sectors to help mitigate risk.
• Time is on your side: The market has historically trended up over the long term. Invest consistently and stay patient for your wealth to grow.

Becoming a lifelong learner benefits us in many aspects of our lives – and the financial realm is no different. The learning curve can feel more approachable when new investors have someone they trust to give them a head start. With dedication and perseverance, emerging investors can navigate the market with confidence and strive to build a secure and prosperous future.

Next steps

• Ask questions to help emerging investors uncover the best place for them to start with their investing journey.
• Consider including your adult-aged children in a call or meeting with your financial advisor
• Remind early and often that investing is a journey and that our goals and needs change over time.

Sources: https://smartasset.com/investing/types-of-investment, https://www.investopedia.com/terms/i/investing.asp, https://www.finra.org/investors/investing/investing-basics

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation.

This article is educational in nature and every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

From zero to 1: How quantum computing is harnessing the power in-between binary

The power of quantum computing lies in its capacity – and its potential is not just a game-changer, but a world-changer.

In the decades since the introduction of the supercomputer, researchers have had one goal: to beat it. And that grand innovative tradition of one breakthrough begetting more has pushed us closer to the arrival of the next technological revolution, the quantum computer.

In 2023, a quantum computer – still an imperfect, “noisy” model according to its own architects – beat a conventional supercomputer in a test to calculate the behavior of an ever-increasing number of particles. In December of 2024, a new quantum chip performed a benchmark calculation in five minutes that would take a supercomputer 10 septillion years. For comparison, the universe is estimated to be around 14 billion years old.

The potential for quantum computing is not just a game-changer, but a world-changer.

“From a macro perspective, it’s going to drastically change a lot,” says John Chan, a director of technology at Raymond James. “Harnessing this level of computational power will have exponential implications for virtually any industry that requires a lot of data processing.”

But what is quantum computing?

If the supercomputer is the chess master, the quantum computer is playing in 4-D.

“Currently, we’re bound by zero and one, the binary system that forms the basis for all computing,” Chan says. “The goal of quantum computing is to operate in the vast space between zero and one.”

In traditional computers, transistors drive processing with small units of digital information called bits – binary digits. Each bit operates as a one or a zero, essentially, the “on” or “off” states of a current. While the same bit can serve as either number, it can only act as one number – or be in one state – at a time.

Quantum computing uses the principles of quantum physics, leveraging the power of fundamental particles like photons and electrons, to open the door to an entirely new kind of processing. Instead of being in one state or the other, quantum bits (qubits) have the ability to be in superposition, occupying a continuum of states between zero and one at once. This supercharges the speed with which data can be processed.

Currently, many quantum systems are operating in terms of hundreds of qubits. The aforementioned 2023 quantum computer, for example, is a 127-qubit machine. As the number of qubits increases, so does the power and the probability of outperforming legacy systems. One company in the space said it sees 100,000-qubit capacity as the technology’s “inflection point,” and as quantum systems are networked, that point might not be too far off.

What are the practical applications?

Because of the energy requirements – quantum computers must be kept near absolute zero, or -459.67 degrees Fahrenheit, for optimal function – quantum computation isn’t a fit for the simpler, day-to-day tasks performed by systems that can operate at higher temperatures, like our desktop computers, laptops and smart devices.

The potential for quantum computing exists in its capacity. Its ability to process enormous volumes of data positions it as an accelerator technology for other systems.

Chan foresees artificial intelligence being quantum’s largest “consumer,” with the potential to enhance AI’s efficacy across industries.

“The applicability in AI will be broad. For example, in cancer research, AI is used to do lots of trial and error – probably millions of trials and errors in seconds – but it’s still not enough, because the data set for cancer is too large and too complex. That’s an area where more processing power is going to be a game-changer.”

From a market perspective, investors should be watching industries where data is the driver – technology, healthcare, finance, manufacturing – and looking for early adopters that are able to begin applying the technology quickly. However, safety and energy consumption concerns should be factored into the equation.

“The hope is that quantum computers will actually be able to solve their own safety and resource issues, but those are definitely things investors should be paying attention to,” Chan says.

What is the timeline?

Some experts believe we’re 15 to 20 years out from large-scale implementation, but there are also companies signing contracts to offer quantum computing services right now.

“How far off is debatable,” Chan says. “We still have significant technology challenges to get through. The most important thing when it comes to quantum computing is to make it stable, and as of today, there’s a lot of instability.”

But with multiple tech giants all approaching the quantum equation from different angles, stability could come rapidly.

“Think about the first prototypes of the steam engine. The early models didn’t work or failed quickly. But that just shows you where the improvements are needed.”

Sources: New Scientist, Forbes, MIT

This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. There is no assurance any investment strategy will be successful. Investing involves risk and investors may incur a profit or a loss. Companies engaged in business related to the technology sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

AI and cybersecurity: Fighting fire with fire

Artificial intelligence is creating new, more complex cybersecurity challenges. It may also hold the solutions.

The uses for artificial intelligence (AI) are seemingly endless. AI can anticipate the next song we’d like to hear, break down advanced concepts into easy-to-understand terms and help companies operate more efficiently with automated processes.

But it can also be used to support unethical behavior or illegal practices, like cheating in school or committing outright fraud – especially generative AI, which can create new content like text and images through deep learning to gain access to money or sensitive data. The ubiquity of generative AI may account for a projected rise in cybercrime to $10.5 trillion in 2025, from less than $3 trillion in 2020¹.

“Hackers are using AI in increasingly inventive ways,” Raymond James Vice President of Technology Jeff Griffith said while discussing the threats and opportunities AI creates for cybersecurity specialists. “But so are we.”

Risks posed by generative AI

AI is making familiar scams more elaborate and easier than ever to launch. For example, phishing emails used to be relatively easy to spot for the spelling and grammatical errors typical of humans posing as someone they’re not. Today, in any language, cybercriminals can prompt AI to write an email that sounds relatable and natural. They can also use AI to hyper-personalize a scam to make it more relevant to each recipient.

Another concern is the emergence of “deepfakes.” Hackers can easily clone voices and make them say virtually anything. “It’s turnkey and easy to do,” Griffith said, “and not expensive. I cloned a well-known voice for a demo. I didn’t even have to say who it was. I just played it, and everyone knew right away.”

The same technology can be used for video. Right now, you may be able to recognize a deepfake by finding errors in the details, like people with extra fingers or misplaced limbs, but the technology is developing rapidly.

“Compared to where it was two years ago, you can expect not to be able to tell two years from now,” Griffith said.

How AI bolsters cybersecurity efforts

Fortunately, this same technology can also be used to mitigate these threats. Many companies – Raymond James included – are already using sophisticated AI cybersecurity tools to defend their systems and protect their data.

For example, AI can quickly analyze communications and scan vast records that would be impossible for a human to read with the same speed or accuracy. Businesses can also use AI to come up with different attack scenarios cybercriminals might use so they can understand how to defend against them.

“It’s a never-ending race between the good guys and the bad guys,” said Griffith. “You build a castle and fortify it, and criminals look for a way in. That’s why it’s important to use AI – because the bad guys do.”

Some organizations use generative AI tools to help them write stronger code and do it faster. Cybercriminals use those tools, too – to build malware with the speed of a hundred engineers working simultaneously.

“We are using AI to help our developers write better code faster, identify vulnerabilities before they happen and protect our systems in real time,” Griffith said. “It amplifies our experts’ abilities to secure the environment and deliver great functionality – keeping us at the forefront of innovation and safety.”

Source: ¹Cybersecurity Ventures

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

New SECURE 2.0 ‘Super Catch-Up’ contribution for ages 60-63

Here’s what you need to know about the higher catch- up contributions limits

The SECURE 2.0 Act has significantly changed retirement savings rules in recent years. Those changes include, but aren’t limited to, a new RMD age and increased access to 401(k) plans for part-time workers.

And there’s more. Starting in 2025, SECURE 2.0 enhances catch-up contributions for certain older adults. If you’re 60, 61, 62, or 63 in 2025, you may be able to leverage this provision to increase your savings for retirement.

These contributions could also lower your taxable income and potentially reduce your overall tax liability.

Here’s what you need to know about how the new higher catch-up contribution limits will work in most employer-sponsored plans.

Age 50+ catch-up contribution limits 2025

Before we dive into higher catch-up limits for ages 60-63 it helps to review standard Age 50+ Catch-ups. Age 50+ Catch-up contributions are additional retirement savings allowances for individuals 50 and older, designed to help boost their retirement savings.

These provisions allow eligible savers to contribute beyond the standard annual limits in various retirement accounts like 401(k)s and IRAs.

This could help make up for years of inadequate savings or maximize your tax-advantaged retirement funds. However, note that Age 50+ Catch-ups are optional for eligible employees if the employer-sponsored plan permits them.

• For 2025, the standard annual deferral limit is $23,500, and the catch-up contribution limit for those age 50 and older is $7,500.
• That means an active participant 50 or older can contribute up to $31,000 this year.

SECURE 2.0 higher age 50+ catch-up contribution limits for 60-63

Under SECURE 2.0, beginning in 2025, individuals ages 60 to 63 by December 31 will be eligible for increased catch-up contributions in their retirement plans.

These higher catch-up limits apply to 401(k), 403(b), and governmental 457(b) plans that currently offer Age 50+ Catch-up contributions. It’s also important to note that this change is optional for employers. So, each plan sponsor will decide whether to implement this feature in their retirement plans.

This higher age 50+ catch-up contribution limit for ages 60-63 is $10,000 or 150% of the standard age 50+ catch-up contribution limit, whichever is greater.

For example, the IRS has just announced that for 2025, the catch-up limit for those age 50+ is $7,500 and the higher catch-up contribution limit for those age 60-63 is $11,250.

To qualify for the higher catch-up contributions, participants must meet specific criteria:

• Be 60, 61, 62, or 63 on December 31 of the calendar year
• Generally, already contributed the maximum deferral amount

Note: Once participants turn 64, they revert to the standard age 50+ catch-up contribution limit.

Roth catch-up rule for high earners

SECURE 2.0 also includes new provisions regarding Roth contributions for high earners. As Kiplinger has reported, IRS rules for this provision have been delayed until 2026.

However, when that provision kicks in, if a participant’s wages with the employer sponsoring the retirement plan exceed $145,000 in the previous year (subject to cost-of-living adjustments), any Age 50+ Catch-up contributions must be made on a Roth basis.

Making Age 50+ Catch-up contributions on an after-tax Roth basis means paying taxes on your retirement savings during years when you sometimes earn more.

2025 Age 50+ Catch-up limits: Bottom line

Introducing higher age 50+ catch-up contribution limits for ages 60-63 under SECURE 2.0 is part of a broader effort to encourage more workers to save for retirement.

With that in mind, allowing increased savings during key pre-retirement years could help some who haven’t been able to save as much earlier in their careers.

However, how this works will depend on employers’ ability and willingness to adapt their plans and systems to accommodate these new catch-up contribution limits as of Jan. 1.

This article was written by Kelley R. Taylor from Kiplinger  and was legally licensed through the DiveMarketplace  by Industry Dive. Please direct all licensing questions to legal@industrydive.com

This material is provided by Voya for general and educational purposes only; it is not intended to provide legal, tax or investment advice. All investments are subject to risk. Please consult an independent tax, legal or financial professional for specific advice about your individual situation.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.