BREAKING: Trump’s "Big, Beautiful Tax Bill" Just Passed (These Changes Are WILD!)

What's up you guys? It's Graham here and you better get ready because we're about to receive some of the biggest tax breaks of the last decade. No joke, if you literally make any amount of money whatsoever and you live in the United States, this could be the most important video you watch all year because in the next few weeks, Congress is expected to pass through a brand new tax plan with some rather unbelievable opportunities that you need to pay close attention to if you like saving a lot of money.

But not everybody qualifies and there are some details that you have to be made aware of. So, if you're curious how you could get no tax on tips, no tax on overtime, $1,000 for every child, $40,000 tax breaks for state and local tax deductions, among a variety of other initiatives, here is everything that you need to know along with some of the fine print that a lot of people miss. Although, before we start, I just have to say this video took me almost a week to complete, going through over,00 pages.

So, if you appreciate the information and find it helpful, all I ask in return is that you hit the like button or subscribe if you haven't done that already. I know it's a small thing to ask for, but it does help out tremendously. And as a thank you for doing that, here's a picture of a goldfish.

So, thanks so much. And also, big thank you to Magic Mind for sponsoring this video, but more on that later. All right.

Now, let's begin with one of the most popular points of the new tax plan, and that would be no tax on tips. See, initially people had this idea that they'd be able to pay themselves a low wage, classify the rest as a tip, and then make huge amounts of money, completely tax-free. But this has it worded completely differently.

And in order to actually qualify, here's what it says. One, you must work in an industry where tipping is customary, like a server, bartender, hair stylist, or taxi driver. So, no, your W9 office job or real estate agent career is probably not going to qualify.

Two, tips must be paid voluntarily and not negotiated or included automatically as a service charge. Three, you cannot be a highly compensated individual, meaning you have to have an income below $150,000 a year. Four, the tip must be in cash.

So, credit card tips do not qualify. And five, the maximum you could claim is $25,000. So, anything beyond this is not taxfree.

Now, when it comes to this, I'm going to be completely honest from a financial perspective. I think it's somewhat worthless because let's be real, most people getting cash tips are not reporting them anyway. And the only benefit to them is that they'd be able to put this on their tax return to get approved for higher loan amounts.

That's about it. In fact, some people might not even want to report cash tips, even if it is tax-free, because it might disqualify them from receiving other government subsidies that only people with lower income qualify for. Separate from that, most people leave a tip with a credit card anyway, which are not exempt from being tax-free.

Hey, this is Greg from the future. I'm editing this video and I do see an IRS definition that cash tips may include credit card charges. So, if that's the case, then that's great.

If not, then it is only cash. I just want to throw this in there as another data point. Let's get back to the video.

So, for people who get cash tips, I don't think it's doing much for them. I'm just saying it like it is. I don't think it will change very much about their situation, but this next part might.

No tax on overtime pay. Again, I think plenty of people had this idea that they would be able to restructure their hours in such a way to receive an absurd amount of overtime that would subsequently be taxfree. But the way this is worded is quite a bit more watered down.

Like first, the premise is that if you were to work overtime, as in more than 40 hours a week, that overtime pay could be deducted from your federal income taxes. Or I guess in other words, if you make $1,500 in a year in overtime, you could get a $1,500 tax deduction, therefore making it completely tax-free in addition to your standard deduction. Second, to qualify for this, you must make under $150,000 a year.

So, no highly compensated individuals are eligible for this. Third, this would apply to all income made between 2025 and 2028, assuming you have a valid Social Security number. And four, I could be wrong here, but there's nothing in the build that specifies if the entire amount is taxfree or just the 50% overtime bonus.

So, if it's the entire thing, that's actually pretty significant. If it's the bonus, it's still pretty good. Now, in terms of my own thoughts on this, I have to say it is pretty appealing, but do keep in mind that only 8% of hourly workers and 4% of salaried workers receive or are eligible for overtime pay.

So, this might only apply to a small percentage of people out there, but if you do qualify, it's some pretty substantial savings. Like our next one, a $40,000 state and local tax deduction. See, prior to the 2017 Tax Cuts and Jobs Act, state and local taxes were able to be completely deducted from your federal income taxes.

Meaning, if you lived in California and you spent $30,000 on state taxes and $20,000 in property taxes, that's $50,000 that you were able to deduct from what you would owe the federal government. But beginning in 2018, all of that changed. Instead of deducting $50,000 off your taxable income, the new tax plan capped state and local tax deductions at just $10,000 total, regardless of if you were single or married, and not adjusted to inflation, leaving residents in states like California, New Jersey, and New York paying a lot more than they did before.

However, this new bill would increase the state and local tax deductions to $40,000, but only if your adjusted gross income doesn't exceed $500,000 a year. Otherwise, if it does, the original $10,000 salt cap still applies. And this is meant to prevent wealthy people in high income tax states from receiving the majority of the benefit.

On top of that, in order to receive this, you must also itemize your deductions instead of taking the standard deduction of $30,000. Meaning, you better be paying a lot in state and local taxes for this to actually be worth it. From my perspective, I think the standard deduction at $30,000 is large enough that most people are not going to utilize the higher salt cap unless they're paying a lot in state taxes, property taxes, and mortgage interest.

And even then, they're only getting a marginal difference between the $30,000 they could be taking and the $40,000 they might be getting if they itemize. But sure, it is an improvement. I wasn't expecting anything anyway, so at least it's something kind of like the next one, which I have a feeling you're definitely going to want to hear about because chances are it will apply to you.

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All right, so in terms of the latest tax plan, we have another one that could apply to a lot of people, and that would be deducting interest on personal car loans. Like, here's something to consider. As of right now, the average car payment comes in at $742 a month at an average interest rate of 6.

35% with an average loan size of $41,000. Typically, the interest you pay is not something you can deduct from your taxes, unless you use it as a business expense, but that could all soon change. If this bill passes in its current form, you would be able to deduct the interest paid on a personal used vehicle up to $10,000 a year for tax years 2025 through 2028 on top of the standard deduction, but only if the car is made in the United States.

On top of that, this deduction begins to phase out once you make more than $100,000 a year single or $200,000 a year married, with the deduction being reduced by $200 for every $1,000 you make above that limit. So basically, once you make over $150,000 single or $300,000 married, you no longer get the benefit. Overall, I actually think this is pretty fantastic for people who buy Americanmade cars, and being able to take this write- off on top of the standard deduction is pretty appealing.

But I do worry this might incentivize some people to take larger loans than they should because the interest payments, a tax write off. So my only word of caution here is not to take out an excessive loan just for the sake of getting a write off. But if you happen to qualify for a car you would have bought anyway, then yes, it's an added benefit.

Although, speaking of cars, there is one downside to this that you have to be made aware of because it is going away very soon. And that would be eliminating the $7,500 clean vehicle tax credit. For those unaware, over the last few years, electric vehicles could qualify for a $7,500 tax credit if you make under $150,000 single or $300,000 married.

Essentially, the government was basically just giving people $7,500 to go and buy an electric vehicle as part of their clean energy rebates. But it does look as though this is going to come to an end by 2026. This also phases out other clean energy incentives like solar and residential clean energy.

So, if you want to claim any of these expiring rebates and incentives, you better act pretty soon before they go away. But not all hope is lost because if you have a child, you could receive $1,000 within a Trump account. Now, this one is probably going to be the most controversial simply based on the name alone.

Like, initially it was called a MAGA account and then it was later referred to as the Trump account. But the premise is pretty simple. Eligible children born 2025 through 2028 in the United States with a valid social security number will receive a one-time tax credit of $1,000 funded by the IRS into an account that could then be invested.

The goal here is that with compound interest, $1,000 will grow to an amount that could then be used towards qualifying expenses like higher education, business startup costs, or a first-time home purchase taxed at long-term capital gains rates. Of course, non-qualifying expenses like Coachella would be subject to a 10% penalty plus ordinary income taxes. And if you don't use any of the money by the age of 31, the account will automatically be cashed out and you'll pay taxes at an ordinary income tax rate.

In terms of how much this could grow to, assuming $1,000 invested at birth at an average return of 9%. That would equate to more than $13,000, which isn't bad for something that takes no work whatsoever, no thought. Just invest it once and be done with it.

Now, in terms of what I think about this, I got to say I'm a fan. $1,000 is $1,000, and that's a significant amount of money to give a child a head start, especially for families that otherwise couldn't afford it. But this also isn't that much different from a parent just contributing $1,000 to a taxable brokerage account in the name of their child that could then grow completely taxfree if they're below the income threshold.

And there wouldn't be any penalties for withdrawing the money early when their kid eventually wants to spend $1,500 going to EDC. Not to mention, they could also just contribute to a Roth IRA and then all the profits will be completely taxfree by the age of 59 and a half regardless of how much money they make. But like I said, a free thousand dollars is still a free thousand dollar.

It's not worth looking a gift horse in the mouth, as they say. So that is quite interesting. Also like our next one, extending the Tax Cuts and Jobs Act.

This was a tax plan that was implemented in 2018 and scheduled to expire at the end of 2025. But now with this being continued, the top tax bracket is going to remain at 37% versus the previous 39. 6%.

Those amounts will more or less be adjusted to inflation every year, and we're going to get another round of 2018 tax cuts that were significant for business owners. For instance, this initially provided a 20% pass through deduction for business owners who operated an LLC or a corporation. It doubled the estate tax exemption, and it allowed 100% bonus depreciation in the first year for business use.

Meaning, if you bought a plane or a heavy car or a big piece of machinery, you could deduct 100% of the cost off your taxes, even if you only put 10% down. Honestly, from the entire plan, this would be the largest write- off for high-income earners. And if you fall into the right category, you could wind up saving a lot of money.

That's why if you run your own business, it's worth it to have an accountant go through this entire plan to see exactly what you'd be able to qualify for because it might make sense to invest a lot back into your business over these next few years. Although, you know what's not included? No tax on social security income.

That's right. I know this was a popular one, but they decided not to include it because most likely this would only apply to wealthy retirees who are already making a lot of money. But not all hope is lost.

Instead, they simply added $4,000 to the standard deduction for those collecting Social Security, phasing out above $75,000 a year if you're single or $150,000 a year if you're married. Essentially, this could theoretically shield some, if not all of the social security income is being tax-free, especially since not all social security is taxed. So, yes, they will get something, but the entire amount is not necessarily going to be taxfree.

Although it will be in some cases, but not in all cases. Yes, I know it's confusing, and yes, the tax code makes really no sense. Now, obviously, there are plenty of other details here that I can't feasibly cover because the entire thing is over,00 pages long, but the ones I listed are the items that are receiving the most attention that probably apply to the vast majority of people watching this video.

In terms of what I think about the overall plan, honestly, I really don't have that many complaints. Like, obviously, it's going to add a lot to the federal deficit, and that I do have concerns about. But in terms of the plan itself for everyday people, chances are they are going to save a little more money than they did before.

Plus, you could also argue that tax money is better spent in the hands of individuals than the government. But you know what? Again, we'll save that for another video.

Big picture, though, if you make under $150,000 single or $300,000 married, and you make cash tips or work overtime, this bill is pretty good. If you're a self-employed business owner, this bill is even better because you could potentially pay no taxes whatsoever with bonus depreciation. But there is one final thought to keep in mind.

Even though this has passed the House and it's currently in the Senate, where Republicans have the majority, keep in mind that there are still a few final changes that will likely occur before this gets passed. And these are a few of these sticking points. One is how aggressively this targets green energy incentives.

Two is the $40,000 salt deduction. and three has to do with cuts to Medicaid and other health programs. That's why at the bare minimum, we do have a framework for what's expected to go through, but the final version will be slightly different from what we see here with further clarification and dare I say it, some reductions from the overall fiscal deficit.

Basically, just take this video as a blueprint for exactly what they want to happen and let me know your thoughts down below in the comments section because I will do my best to read and reply to as many of you as I can. So, thanks so much. Also, make sure to hit the like button or subscribe if you haven't done that already.

Really appreciate it.