5 Ways Families Benefit from the One Big Beautiful Bill Act

The One Big Beautiful Bill Act (OBBBA), enacted in 2025, introduces several financial provisions that directly support families by increasing disposable income, encouraging savings, and providing tax relief. Below are five key ways families can benefit from this legislation, based on its official summaries and economic analyses.

1. Increased Tax Deductions for Working Families

OBBBA provides deductions that increase take-home pay for families in certain occupations. For instance, workers earning less than $150,000 a year can deduct up to $25,000 on qualified tip income, from earnings from service industry jobs like waiting tables or driving.

Additionally, a deduction of up to $12,500 on overtime pay ($25,000 for joint filers) supports families who depend on extra hours. These deductions, available from 2025 to 2028, can significantly reduce taxable income, potentially saving families thousands each year, though they require careful tax planning to maximize benefits.

2. Higher Standard Deduction and Permanent Tax Rates

The legislation permanently sets individual income tax rates between 10% and 37% and nearly doubles the standard deduction to $15,750 for single filers and $31,500 for joint filers, with annual adjustments for inflation. This change simplifies tax filing and lowers taxable income, helping families keep more of their earnings. For many, this could mean hundreds or thousands of dollars in extra annual income, offering greater financial flexibility for household expenses or savings.

3. Enhanced Child Tax Credit

Families with children benefit from a permanent increase in the Child Tax Credit to $2,200 per child, up $200 from previous levels, with adjustments for inflation. This credit directly lowers tax bills, putting more money back into family budgets for essentials like childcare, education, or extracurricular activities. While refundability is limited, the higher credit amount provides significant support for families raising children, helping to offset the rising costs of parenting.

4. New Savings Opportunities for Children

OBBBA introduces "Trump Accounts," which provide a $1,000 government contribution for newborns from 2024 to 2028. These accounts grow tax-free until the child reaches 18, with funds available for education or other qualified expenses. Additionally, expanded 529 plans allow families to withdraw up to $20,000 tax-free for K-12 and homeschool expenses. These provisions encourage long-term savings, helping families build a financial foundation for their children’s future education or other goals.

5. Support for Vehicle Purchases and Senior Deductions

The act includes a $10,000 deduction for interest on loans for U.S.-assembled vehicles, available from 2025 to 2028, lowering the cost of purchasing a family car and making transportation more affordable.

Additionally, seniors aged 65 and older benefit from a $6,000 additional deduction ($12,000 for couples), on top of the existing senior standard deduction, though it phases out for singles earning above $75,000. This temporary measure (2025-2028) reduces taxable income for older family members, helping grandparents or senior parents in multigenerational households retain more income for living expenses or medical costs.

Bottom Line

The One Big Beautiful Bill Act offers families various financial benefits, including increased tax deductions and credits, as well as new savings opportunities. These measures aim to boost disposable income, help cover child-rearing expenses, and promote long-term financial stability. However, families should consult tax professionals to fully understand their eligibility and maximize these benefits, since some provisions are temporary or have income-based limits. By taking advantage of these opportunities, families can better manage their finances and plan ahead.