Trump’s Big Beautiful Bill: Our latest insights and potential impact for investors

As we hit Q3 2025, President Donald Trump’s largest piece of legislation since reelection – the One Big Beautiful Bill (OBBB) Act – made it through Congress after months of debate. It was officially signed into law on July 4. Although it will take years to measure the bill’s full impact, it could make even bigger waves than the Tax Cuts and Jobs Act (TCJA) of 2017.

“There's a reason that the word ‘big’ is in the name of the bill. It covers a lot,” said Elyse Ausenbaugh, Head of Investment Strategy at J.P. Morgan Wealth Management.

Here's a breakdown of the OBBB, including key provisions and how business owners and investors can plan for them.

Tax cuts being extended under the Big Beautiful Bill

Trump’s landmark 2017 legislation, the TCJA, put in place many temporary provisions that were set to expire at the end of 2025. The OBBB not only extended those provisions but made them permanent, including:

What’s being cut

The OBBB is expensive legislation, seeing as it increased the federal debt limit by $5 trillion. While Trump’s tariffs are supposed to help offset the cost, there were also big funding cuts made for that purpose, including cuts to:

Under the umbrella of energy tax credits, “The EV [electric vehicle] tax credits have been repealed. Some of the others that were part of the Inflation Reduction Act (IRA) are going to be phased down over the next couple years,” said Sarah Daya, Central Division Lead of Wealth Planning & Advice at J.P. Morgan Wealth Management.

What’s new

New provisions include:

Most of these provisions have limitations or fine print. For example, the auto loan deduction only applies to new vehicles where the final production/assembly was done in the U.S.

For the tip and overtime laws, single filers making over $150,000 and married couples making over $300,000 won’t qualify for the full deduction amounts (or any, depending on how much they earn).

Additionally, “That $40,000 [SALT deduction cap] does have a phase-down for households making more than $500,000 and high-income earners making more than $600,000,” Daya said.

Action items: What to do now that the Big Beautiful Bill has passed

Some of the provisions under the OBBB aren’t effective right away, and even the ones that are might not change much as it relates to your financial plan. However, there are a few things to think about doing now if they apply to you.

For those who regularly give to charity, “There is [now] a 0.5% floor before you're able to deduct your charitable giving on your tax return starting January 1, 2026,” Daya said. “If you’re thinking about making large charitable gifts, it may be a better solution to do it in 2025 and frontload your giving, because that deduction will be worth more than it will be in 2026.”

Business owners may also want to think about implementing any structural changes they’ve been considering.

“There are some qualified small business stock provisions that change. If we need to make decisions about converting from an LLC to a C-Corp., the sooner we do that, the better,” Daya advised.

What to plan for in the longer term

Some longer-term planning considerations involve education, health care and wealth transfer.

“One of the things that the bill does is it caps the ability for students to borrow. So if we're parents and we've got kids who are thinking about going to law or medical school, maybe we need to build in more goals about how that is going to be funded,” Daya said.

The bill also cuts Medicaid funding and introduces new work requirements. If this affects your family, you may need to plan for alternative health insurance and associated costs.

Also, “Start to think about overall wealth transfer strategies. The estate and gift tax exemption has become very generous now at $15 million per person. But there are still going to be opportunities to get assets out of your estate at lower valuation – if we've got liquidity events happening with a business, for example, or asset prices continue to go up – and I think that wealth transfer piece is going to be really important to consider over the next three, five, 10 years,” Daya said.

Economic outlook

As far as economic impact, there’s not expected to be too much of an effect from the bill in the near term. Any economic thrust that stems from taxpayer incentives will likely be mitigated by “tariff drag,” according to Vinny Amaru, Global Investment Strategist at J.P. Morgan Wealth Management.

Right now, the effective tariff rate is around 8%-9%, but Amaru expects it to go up. “If you want to raise revenue, you need to keep tariff rates higher. We think it's going to end up in the 10%-15% [range],” he said.

The net result, for 2025 at least, will likely be slower economic growth.

“The framework we've been using this year is that you have these shocks and shock absorbers. Tariffs are a shock, but we have really strong shock absorbers in the economy. Consumers and businesses are starting from a healthy place. When we've taken these things into account for 2025, we think that growth slows from that 2% we were expecting at the beginning of the year to something closer to 1%, but not a recession,” he explained.

Investing areas to focus on as the Big Beautiful Bill takes effect

“Even with markets near all-time highs, we see further upside in the broad equity market. But we want to focus on the areas where we have the highest conviction. That's going to be in the broadening out and buildup of the AI ecosystem and financials,” Amaru said.

According to the Census Bureau, the percentage of companies that plan to use artificial intelligence (AI) in the next six months has doubled over the past year but is still only 12%. That leaves a lot of room for growth, especially with the jolt the OBBB provides in business deductions such as 100% accelerated appreciation, which could help build out additional AI infrastructure.

Amaru added, “Touching quickly on financials, we think that deregulation can impact financials in a really positive way by unlocking excess capital. And we think that excess capital on bank balance sheets can be deployed in a shareholder-friendly way, which could lead to further loan growth, to mergers and acquisitions (M&A), and to buybacks.

“It also doesn't hurt that those happen to be the two biggest sectors in the S&P 500. You can see why when we're positive on those sectors, we can also be positive on the broader market.”

The bottom line

Now that the OBBB has been finalized and signed into law, Americans can better prepare their finances for the new provisions. They can also adjust their investment portfolios as they see fit, and hopefully take advantage of growth in those key areas – AI and financials – that Amaru mentioned.

During this period of change, it can be helpful to remember that the economy is doing well – we’re not in a recession. While it’s important to stay informed on new legislation and consider what it means for your future, remember that it’s not likely to upend your existing plan.

To take a closer look at the OBBB and how it relates to your finances, consider speaking with a J.P. Morgan advisor and creating a personalized strategy.

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