We’re halfway through 2025, and the news headlines have been loud...
Let’s start with the markets. Despite a rocky start to the year, the S&P 500 is up 6.2%, international developed markets have surged nearly 20%, and bonds have quietly delivered solid returns. According to CNBC, consumer sentiment just saw its biggest monthly jump in over 30 years, unemployment remains low at 4.2%, and corporate earnings are on track to grow nearly 9% this year. Even dividends are expected to rise faster than inflation. In short: the data looks better than the drama.
Now, layer in Congress’s passage of the One Big Beautiful Bill Act of 2025, signed into law on July 4. At nearly 900 pages, this sweeping tax and budget package locks in many of the 2017 tax cuts, including lower individual rates, a higher standard deduction, permanent corporate tax reductions, while trying to balance some of these tax cuts with spending reductions in areas like Medicaid. Here are some of the major rules that may affect households:
- Current TCJA tax rates and income brackets are now permanent. They were originally going to expire at the end of 2025.
- The standard deduction goes up to $15,750 for single filers and $31,500 for married couples filing together in 2025.
- There is an extra $6,000 deduction for qualifying seniors (sometimes called a "senior bonus") that phases out for gross incomes over $75,000. This rule expires in 2028.
- The alternative minimum tax exemption is now permanent. It also raises phaseout thresholds to $500,000 for single filers, which will be adjusted for inflation going forward.
- The child tax credit increases from $2,000 to $2,200 per child, with future changes adjusted for inflation to keep purchasing power over time.
- The state and local tax (SALT) deduction cap rises to $40,000 from a $10,000 limit with yearly increases of 1% through 2029. It is then scheduled to go back to $10,000 in 2030.
- A deduction for tip income capped at $25,000 yearly for workers earning less than $150,000, effective through 2028.
- Some green energy tax credits are eliminated, including for electric vehicles and home energy efficiency credits.
- The federal debt limit increases by $5 trillion. This will prevent Congress from having to debate and approve debt limit increases for some time, reducing political uncertainty.
- For businesses, the bill expands tax breaks designed to encourage domestic investment and job creation.
Of course, not everything is rosy. The housing market is still lopsided, with more sellers than buyers. Tariffs remain a wildcard for the second half of the year. And the bill's $5 trillion dollar debt ceiling is sparking plenty of debate.
Let’s end on a high note—because there are some reasons to feel optimistic right now.
Nuclear energy is getting a second wind. New York is leading the charge with plans to build a brand-new, zero-emission advanced nuclear power plant. It’s the first U.S. project of its kind in 15 years, and it could mark the start of something much bigger. If other states follow suit, we might see nuclear become a key part of the clean energy future and with more projects, costs could come down too.
Then there’s what’s happening in science and medicine. Cardiovascular disease has long been the leading cause of death in the U.S., but that might not be the case forever. Thanks to breakthroughs in gene-editing technologies, scientists are inching closer to a whole new category of heart disease treatments, ones that could actually prevent the condition altogether. And those discoveries could ripple out into breakthroughs for other diseases too.
Zooming out, big picture: yes, there’s still short-term uncertainty. But big, transformational shifts are quietly underway, powered by innovation, progress, and human drive. As investors, these are the trends we want to keep our eyes on. Not just what’s happening today, or tomorrow, but what might shape the future.
And if you want to talk more about how this all connects to your goals or your financial plan, I’m just a call or message away...
Jennifer
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