Understanding the “Big Beautiful Bill”: Tax Changes That Impact Families Balancing Careers and Kids
Balancing Priorities at the Career and Family Growth Stage
The stage of life where careers accelerate and families expand is one of the most rewarding, yet challenging, periods for many households. With children at home, career responsibilities increasing, and personal health and relationships to manage, there are constant demands on time, energy, and finances.
As a father of four, including triplets, I know firsthand how overwhelming this stage can feel. Raising a family while building a career truly takes a village. While the early years of parenting may feel more physically exhausting, the school years and beyond add a new layer of mental strain. Add financial complexity on top, and the load can become daunting.
But there’s good news: with intentional financial planning, you can bring clarity and order to this chaos. The recently updated “One Big Beautiful Bill” created changes that directly impact families in this stage of life. Understanding these updates, and weaving them into your broader plan, can help reduce stress and allow you to focus on what matters most.
The Power of the Standard Deduction
One of the most significant shifts in recent tax legislation is the expanded standard deduction. For families filing jointly, the deduction now sits at $31,500. This is a game-changer because it reduces the need for itemizing deductions for most households.
Prior to 2017, nearly 70% of Americans itemized. Today, fewer than 20% do. At TAMMA, I’ve seen that close to 90% of the returns we prepare now take the standard deduction. This not only simplifies filing but, in many cases, results in lower overall tax bills.
For families balancing careers and children, less complexity and lower taxes are both welcome outcomes.
Understanding SALT Deduction Changes
The state and local tax (SALT) deduction has long been a point of debate. Previously capped at $10,000, the deduction limit has now increased to $40,000 for married couples filing jointly (and $20,000 for single filers). However, this increase only applies from 2025 through 2029. After 2030, the cap reverts to previous levels.
There’s also a phase-out tied to modified adjusted gross income (MAGI). For joint filers earning more than $500,000 (or $250,000 for singles), the deduction begins to phase out. At $600,000 or more, you’re back to the $10,000 limit.
For families living in high-tax states such as New York or California, this deduction may still provide meaningful relief. But for many households, the standard deduction will continue to make more sense.
Child and Dependent Care Benefits
For parents, the updated child tax credit and dependent care provisions are particularly relevant.
Child tax credit: Increased from $2,000 to $2,200 per child. However, the credit begins phasing out at $400,000 for joint filers.
Dependent care credit: Families can deduct up to $3,000 of expenses for one child or $6,000 for two or more. The credit percentage depends on your income bracket, ranging from 35% for lower earners down to 20% at higher incomes.
Another important update: dependent care flexible spending accounts (FSAs) now allow contributions of up to $7,500, up from $5,000. Unlike tax credits, there is no income phase-out here. The challenge is the “use it or lose it” structure—if you don’t spend the funds by year’s end, they’re gone. Managing FSAs carefully is key.
Health Savings Accounts: A Triple Advantage
While FSAs are helpful, health savings accounts (HSAs) remain one of the most powerful savings tools in the tax code. HSAs offer three unique benefits:
Contributions are tax-deductible.
Investments grow tax-deferred.
Withdrawals for qualified medical expenses are tax-free.
For families in the career and family growth stage, medical costs are a reality—between pediatric visits, urgent care, and specialists, expenses add up. But if you can afford to let HSA balances grow rather than spend them immediately, you create a powerful long-term retirement asset. Think of it like a Roth IRA designed specifically for health costs.
Vehicle Interest Deduction
An often-overlooked benefit is the vehicle interest deduction, which can save families hundreds of dollars. To qualify, the vehicle must be new, assembled in the U.S., and financed with a qualifying loan. Income phase-outs apply at $100,000 of adjusted gross income, limiting eligibility for some households. Still, for those who qualify, this can reduce taxable income in a meaningful way.
Introducing “Trump Accounts” for Children
One of the most talked-about provisions is the creation of “Trump Accounts,” scheduled to take effect in 2026. These accounts provide every child under 18 with a Social Security number the opportunity to establish a government-supported investment account.
Children born between 2025 and 2028 will receive an automatic $1,000 federal contribution.
Families, relatives, or friends can contribute up to $5,000 annually in after-tax dollars.
Employers, including small businesses, can add up to $2,500 per child, likely counting toward the $5,000 total.
Withdrawals after age 18 will be taxed like a traditional IRA, with contributions tax-free but earnings taxed at withdrawal.
While the details are still evolving, these accounts could complement 529 college savings plans or custodial IRAs. For families with young children, they represent another opportunity to build a strong financial foundation.
Planning Actions for Families in This Stage
Given the layers of complexity in this legislation, it’s important to focus on actionable steps that families can take:
Maximize dependent care benefits: Take advantage of the increased FSA limit if your family uses child care services.
Leverage HSAs: Treat them as long-term retirement accounts, not just short-term spending vehicles.
Balance Roth vs. Traditional contributions: For younger families in lower tax brackets, Roth contributions often provide the most long-term value.
Plan for state-specific benefits: Many states offer tax deductions for 529 plan contributions. Even small amounts add up over time and provide emotional reassurance that you’re taking action for your child’s future.
Remember charitable deductions: Even if you take the standard deduction, you may qualify for an additional $2,500 (married) or $1,500 (single) charitable deduction.
Finding Harmony in the Chaos
The career and family growth stage is filled with demands: children, careers, finances, and personal health all compete for attention. Financial planning won’t eliminate these pressures, but it can create clarity and peace of mind.
At TAMMA Capital, we help families design roadmaps that align tax, retirement, and education planning into a cohesive strategy. Life will always throw surprises your way. But with thoughtful preparation and the right partner, you can meet those challenges with confidence.