The Big Beautiful Bill

The Big Beautiful Bill Just Passed — Here’s What It Means for Your Taxes, Withdrawals, and Family Strategy

On July 3rd, 2025, Congress passed a sweeping federal tax reform package nicknamed the “Big Beautiful Bill.” While the name has sparked memes, the content is serious: changes to tax brackets, small business incentives, Roth eligibility, and more.

For dual-income households juggling family, retirement, and taxes — especially in no-income-tax states like Florida — this legislation opens a window of opportunity.

Let’s walk through the bill’s key points and how they apply to a familiar, real-world example. Then we’ll show how to draw money strategically from taxable and retirement accounts in a way that maximizes your net income over time.

A Familiar Florida Household

Consider a married couple, both 62, living in Florida:

• Spouse 1: A Realtor, earning $100,000 through an S Corporation
• Spouse 2: W-2 employee at a pharmaceutical company, earning $100,000
• Two high school–aged children
• Assets:
• $400,000 in a taxable brokerage account (with appreciated investments)
• $700,000 in combined 401(k)s

Key Tax Wins from the Big Beautiful Bill (July 3, 2025)

1. Child Tax Credit Extended

The $2,000 per child credit remains and is refundable. Phaseouts now begin at $400,000 for joint filers, so this couple qualifies in full for $4,000 in credits.

2. Section 199A (QBI Deduction) Extended

Small business owners structured as S Corps or sole proprietors keep access to the 20% Qualified Business Income deduction. On $100,000 net income, the Realtor deducts $20,000 — saving approximately $2,200 in taxes.

3. Roth IRA Contributions Expanded

Income phaseouts for Roth contributions now begin around $240,000–$260,000 (MAGI) for married couples. This couple qualifies to contribute $7,000 each directly into Roth IRAs — $14,000/year into tax-free growth.

4.  529-to-Roth IRA Transfers

You can now roll over up to $35,000 total per child from a 529 plan into a Roth IRA, provided:

• The 529 has been open for at least 15 years
• The child has earned income
• Annual rollovers follow Roth IRA limits

This lets unused education funds turn into long-term tax-free retirement funds for the kids.

5.  Long-Term Care Insurance Deduction

A new above-the-line deduction of up to $4,000 per couple for qualified LTC premiums now applies. This rewards families that plan early for retirement health care needs.

6.  Expanded Retirement Contributions

Contribution limits for Solo 401(k)s and SEP IRAs were raised. The Realtor could now defer over $30,000/year pre-tax, combining salary deferrals and employer contributions from their S Corp.

7.  Standard Deduction and Bracket Shifts

The standard deduction for married couples is now $29,200. Bracket thresholds have also shifted upward, offering more breathing room for taxpayers managing blended income types.

Florida Planning Bonus: No State Income Tax

Florida residents gain additional efficiency:

• Capital gains and retirement distributions aren’t taxed at the state level
• QBI, Roth conversions, and business depreciation flow through without state tax complications

This makes every federal planning move more powerful when compared to clients in high-tax states.

Smart Tax Planning: Golf Cart and Kids on Payroll

Two underused strategies now even more relevant:

1. Section 179 Expensing: Yes, Even for a Golf Cart

Under the extended Section 179 provisions, the Realtor can fully expense eligible business equipment.

Example:

• A street-legal golf cart used to tour communities and show homes
• Purchase price: $10,000
• Deduct the full amount in Year 1 if it’s used more than 50% for business

This helps offset income and fund practical tools for real estate work.

2. Put the Kids on Payroll

If the children work in the Realtor’s business — helping with:

• Marketing tasks
• Data entry
• Open house prep
  …they can be paid a fair market wage.
  In 2025, up to $14,600 per child can be paid tax-free (standard deduction threshold), and the wages are deductible to the S Corp.

This lowers taxable income and moves money into the household at 0% tax.

Before vs. After: Tax Impact Summary

Now: How to Take Money Out Tax-Efficiently

This couple must decide how to begin drawing from their taxable and tax-deferred accounts. Here’s a tax-smart withdrawal sequence:

Step 1: Use the Taxable Brokerage Account First

• Realize long-term capital gains while staying under the $94,050 0% capital gains bracket
• Sell $40,000 of appreciated stock and owe $0 in federal capital gains tax

Step 2: Delay 401(k) Withdrawals

• Let them grow tax-deferred until Required Minimum Distributions (RMDs) start at age 73 or 75
• Avoids pushing income into higher brackets early in retirement

Step 3: Convert 401(k) to Roth IRA in Low-Income Years

• Convert $40,000–$60,000/year from the 401(k) to a Roth IRA
• Stay under the 22% bracket ceiling
• Future withdrawals are tax-free and not subject to RMDs

Step 4: Contribute to Roth While Eligible

• Direct contributions of $7,000 per spouse = $14,000/year
• Continue while income stays under new thresholds

Step 5: Plan for Qualified Charitable Distributions (QCDs)

 Later

• Starting at 70½, up to $100,000/year can be donated directly from IRAs to charity
• This satisfies RMDs without triggering taxable income

Sample Year-One Strategy

Final Thoughts

The Big Beautiful Bill brings strategic advantages for business owners, parents, and retirees — but only if you know how to leverage them.

This Florida couple saves over $4,400/year in taxes, gains access to $14,000 in tax-free Roth space, reduces future RMDs through timely conversions, and unlocks 529-to-Roth rollovers for their children — all while maintaining flexibility for healthcare and charitable goals.

As always, consult with your tax advisor and financial planner before implementing any withdrawal or business strategy. Every household’s situation is different, and small errors can lead to unnecessary taxes or missed opportunities.

If you’re not receiving coordinated guidance across investments, taxes, business income, and retirement strategy, now may be the time to rethink your financial team, our area has quality strategic planning and tax strategy firms. - Move on from proprietary bank and traditional investment only product sales or tax filing only preparation firms.  

Big policy shifts like this don’t come around often — make the most of them while you can.

Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This
information is found in the issuer's official statement and should be read carefully before investing.  Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan.

Sources:

1.        IRS Publication 505 – Tax Withholding and Estimated Tax
https://url.avanan.click/v2/r01/___https://www.irs.gov/publications/p505___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OjkxMzk6ZDQ2ZjkwNmNlMGU2OWE4YzVkZjZhOWJlOTRkNGYxNzQ0NmIzMjY4OWU4Yzg5MzA2NDkwNWNmNDZjMmEwYTMxODp0OlQ6Rg
(used for calculating estimated tax and withholding strategies)

2.        IRS Publication 590-A and 590-B – Roth IRA Contributions and Distributions
https://url.avanan.click/v2/r01/___https://www.irs.gov/forms-pubs/about-publication-590-a___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OjI5OTY6YzE0YjY3ODA1MTAzZjNjNGIzNzlkYzc4NzUxNTg0NzQ5ODM3ZjBkNzA2NDliMzRmMGU3N2YxMzI1NDgzYjMzZjp0OlQ6Rg
(income limits, eligibility, and withdrawal rules for Roth IRAs)

3.        IRS Publication 970 – Tax Benefits for Education
https://url.avanan.click/v2/r01/___https://www.irs.gov/forms-pubs/about-publication-970___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OjUwMjk6MzU2NjhiZGVlMDJjZmYxZGQyNzVhOTIxMmVhZmVhZjc4NzU1MDVmZTcwZWM5YmE4YTI3Yjc3OGFiMDFhOTgyODp0OlQ6Rg
(529 plan rules and coordination with education credits and rollovers)

4.        IRS Notice 2024-55
(Guidance on penalty-free withdrawals and Roth conversion flexibility following SECURE 2.0)
https://url.avanan.click/v2/r01/___https://www.irs.gov/pub/irs-drop/n-24-55.pdf___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OjlhZjU6YzEwZGE0NTU2Mjk0Yjc0M2VmOWVkOGI2ZjFmNmEwNDlhNzEwNTI2ZTA4MzVhOTM3OTY1MTA3Y2YxZTdjM2UyMDp0OlQ6Rg

5.        Internal Revenue Code Section 179 – Depreciation and Expensing
https://url.avanan.click/v2/r01/___https://www.law.cornell.edu/uscode/text/26/179___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OmM2NWU6ZjY1MWI3N2RjZDZkYzBmY2UwNjlkMzE0OTFjZjg2YjZlOWQwZjQ1NmM1YTA2ODU3ZDZhMDk2NWFhYTU0NTFmYzp0OlQ6Rg
(used to reference expensing rules for business purchases like a golf cart)

6.        Congressional Budget Office Summary: Tax Provisions of the 2025 Reform Act (“Big Beautiful Bill”)
https://url.avanan.click/v2/r01/___https://www.cbo.gov/publication/2025-tax-act-summary___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OjNhMjE6MTM5ZDNiZGJkY2JhMDI5NjliM2Q3YTM0ZmM2ZDc4ZTY4OGMwNWMyMTRkYzM4NjZhZDBkMTFhZDFlYzQyY2Y5Njp0OlQ6Rg
(used for updated thresholds, deduction extensions, Roth IRA and QBI provisions)

7.        IRS Topic No. 554 – Self-Employment Tax and Income Shifting
https://url.avanan.click/v2/r01/___https://www.irs.gov/taxtopics/tc554___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OjUzNTk6MGM5MDdiZWEwOWUzMDMyN2MzYWM0ODRjMzc3NDY2ODRiODliNTllZDY3MWRkMGFhYTVjMDBkNWVkMGJmYTk3Mzp0OlQ6Rg
(used for structuring children on payroll under a business owner parent)

8.        IRS Publication 526 – Charitable Contributions
https://url.avanan.click/v2/r01/___https://www.irs.gov/forms-pubs/about-publication-526___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OjlkZjc6ZDVkY2IyMjZhNTQ5ODEzZmJiNmIwNjllZmYwZDgyZThjMWY4MDU2MjVjNDAwODViOWFkZTkyN2MyZTJiZTA2Nzp0OlQ6Rg
(used for Qualified Charitable Distribution (QCD) rules from IRAs)

9.        Tax Foundation – 2025 Tax Brackets and Standard Deduction Estimates
https://url.avanan.click/v2/r01/___https://taxfoundation.org/2025-tax-brackets/___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OmE5OTk6YzI4MjlhNGQwYTNkOTMwZjA4ZDQwY2UzYTA5YjQ4NDBjN2EwNzA2MmUzZjFiMTUwZGJjMDUwYjI0YWY3YjZlMTp0OlQ6Rg
(used for all bracket thresholds and effective rate calculations)

10.     Social Security Administration – 2025 Retirement Age and Earnings Limits
https://url.avanan.click/v2/r01/___https://www.ssa.gov/news/press/factsheets/colafacts2025.pdf___.YXAzOmFrc2FsYXdlYWx0aGFkdmlzb3JzOmE6bzo4Njc0NzZiMDc3ZTNjNTAwZWRjNmFmODFmNjNjMTIzYzo3OjM2YjY6ZjkxZTY5ZWE5NDZhZDNkMjdlYTgyM2NmN2UyM2ExOTc4ZTdkM2NhNTU3ZWZmY2JjYzdkMmI3MjI1YmJlYWRkOTp0OlQ6Rg
(for coordinating withdrawals and Social Security timing strategies)

Evan R. Guido is the Founder of Aksala Wealth Advisors LLC, a 2018 Forbes Next-Gen Advisors List Member, and Financial Professional at Avantax Investment Services^SM. Evan heads a team of retirement transition strategists for clients who consider themselves the “Millionaire Next Door.” He can be reached at 941-500-5122 or eguido@aksalawealth.com.   Read more of his insights at https://finance.heraldtribune.com/category/ask-guido/. Securities offered through Avantax Investment Services^SM, Member FINRA, SIPC.  Investment advisory services offered through Avantax Advisory Services^SM, Insurance services offered through an Avantax affiliated insurance agency.  6260 Lake Osprey Dr. Lakewood Ranch, FL 34240.  The views and opinions presented in this article are those of Evan R. Guido and not of Avantax Wealth Management^® or its subsidiaries.  These opinions are based on Evan R. Guido observations and research and are not intended to predict or depict performance of any investment.  These views are as of the close of business on 7/10/2025 and are subject to change based on subsequent developments.  Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. These views should not be construed as a recommendation to buy or sell any securities.  Past performance does not guarantee future results. The S&P 500 is an index of 500 major, large-cap U.S. corporations. Standard & Poor's is a corporation that rates stocks and corporate and municipal bonds according to risk profiles.  You cannot invest directly in an index.  An investment in a money market fund is not insured or guaranteed by the FDIC or any other government agency.  Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.  CDs are FDIC insured and offer a fixed rate of return.  They do not necessarily protect against a rising cost of living.  The FDIC insurance on CDs applies in case of insolvency of the bank, but does not protect market value.  Other investments are not insured, and their principal and yield may fluctuate with market conditions. Investments are subject to market risks including the potential loss of principal invested.  Neither diversification nor asset allocation assure or guarantee better performance and cannot eliminate the risk of investment losses. This information is intended to be educational and does not reflect any particular investment or investment needs of any specific investor. Aksala Wealth Advisors, LLC is not a registered broker/dealer or Registered Investment Advisory firm.  Aksala Wealth Advisors, LLC and Avantax are not affiliated.  Converting from a traditional IRA to a Roth IRA is a taxable event.
A Roth IRA offers tax free withdrawals on taxable contributions.

To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.

Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty.

Some IRAs have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney.

Tax Deferral:  10% IRS penalty may apply to withdrawals prior to age 59 ½.
Tax Free:  Income may be subject to local, state and/or the alternative minimum tax