It's Big, But Is It Beautiful? Let's Talk About It... | Ep 557

ChooseFI

Brad Barrett | Choose FI Media

Financialindependence, Investing, Firemovement, Passiveincome, Frugalliving, Personalfinancepodcast, Daveramsey, Careers, Business, Earlyretirement, Habits

4.8 • 5K Ratings

🗓️ 28 July 2025

⏱️ 63 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Key changes in tax law related to the newly passed One Big Beautiful Bill significantly impact the financial independence (FI) community. Notably, the extension of tax rates and the higher standard deduction provide more planning certainty for early retirees, allowing greater financial management under these new regulations. Brad & Sean Mullaney discuss the critical tax provisions like enhanced charitable contribution deductions for non-itemizers, updates to state and local tax deductions, and the introduction of a senior deduction for retirees. They also explore strategies for maximizing premium tax credits starting in 2026.

Disclaimer

Sean's discussions on the ChooseFI podcast and articles and messages published on ChooseFI.com are intended for general educational purposes and are not tax, legal, or investment advice for any individual. The ChooseFI podcast and its owners, employees, and agents do not endorse Sean Mullaney, Mullaney Financial & Tax, Inc., or their services.

Key Topics Discussed:

Introduction to the New Tax Bill
- Overview of the One Big Beautiful Bill and its significance for the FI community.
Impacts of Extended Tax Rates
- Explanation of the permanence of the tax rates and the increased standard deduction.
Changes to Charitable Contributions
- Details on new deductions for non-itemizers and adjustments to itemized deductions.
State and Local Tax Deduction Update
- Increase of deductible cap from $10,000 to $40,000, impacting itemization strategies.
Exploration of the Senior Deduction
- Introduction of a $6,000 deduction aimed at seniors aged 65 and older.
Understanding Premium Tax Credits
- Strategic planning opportunities utilizing bronze ACA plans and HSAs to maximize tax benefits.

Actionable Takeaways:

Maximize Your Standard Deduction: Consider traditional contributions to optimize your tax situation.
Utilize Bronze ACA Plans: Start in 2026 to lower premiums and leverage HSA contributions for enhanced tax benefits.

Key Quotes:

"The new standard deduction is a game-changer for those pursuing financial independence."
"These are crucial planning implications that can optimize your tax situation."
"Shift your income from high tax brackets to the 0% tax bracket for maximum savings."

Timestamps:

- Importance of premium tax credits for the FI community.
- Risk of the standard deduction decreasing without the new law.
- Optimizing tax situation with traditional contributions.
- Details on the charitable contributions deduction.
- Update on the state and local tax deduction cap.

YouTube Video on Premium Tax Credits: Watch Here [Timestamp: 00:45:00]
Cody Garrett and Sean Mullaney’s Book Notification: Sign Up Here [Timestamp: 00:59:35]

Discussion Questions:

How does the new tax bill affect your approach to retirement planning?
What strategies can be adopted to make the most of the new standard deduction?

Summary:

This episode dives into the legislative changes that may significantly influence financial planning for those aiming for early retirement. By understanding the implications of the One Big Beautiful Bill, listeners can better navigate their financial futures.

Transcript

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0:00.0	Hello and welcome to Choose a Phi. Today on the show, we have Sean Malini, the FI tax guy,
0:04.3	here to talk about the new one big beautiful bill that just got passed earlier in July.
0:10.3	This is coming out at the end of July. So we're trying to turn this around as quick as possible.
0:14.2	Sean highlighted a handful of items that are really especially pertinent to the FI community.
0:19.5	And I think this is going to be one you definitely want to
0:21.8	listen to. Sean and I go through a lot of the very specific provisions, of course, but we also
0:27.5	talk more broadly about planning and how you should think through your asset allocation and
0:32.8	specifically what to think about with premium tax credits, which I know a lot of us are going to
0:38.2	run into when it comes to our medical insurance plan. And this is a big, big open item for people
0:44.0	in the five community. And I think we provide a really nice overview of how to think through this,
0:49.8	how to plan, and how other provisions in this new tax law can actually benefit you for these premium
0:56.1	tax credits. So I think this episode has a little bit of everything and you're really going to
1:00.0	enjoy this. With that, welcome to choose up fine. Sean, it's always good to see you. Thanks for coming on. This is a timely episode. We don't normally do these kind of timely episodes. I'm excited about this.
1:17.0	Brad, thanks so much for having me. Yes. You, of course, are our go-to tax professional, Sean, the FI tax guy. So you've been on many, many episodes and this, you were the person, of course,
1:27.7	that I called when this one big beautiful bill, as it's being called, was signed into law on
1:32.6	July 4th. And there are a lot of things, changes ultimately to the tax code that came into
1:39.3	place with this new law. And we're going to go through a bunch of them today. I think, Sean,
1:43.6	one of the interesting things, and this I suspect is the first of maybe a couple
1:48.7	touch points on this. And I don't want to necessarily read too much on this, but this is a massive,
1:54.0	massive law. And we're always combing the details, right? People like you. And I suspect we have not unearthed every last item,
2:03.3	but you never know. I don't know that for certain, but I suspect. But what you have done today
2:08.5	is come up with a list of items that really impact the fight community. And we're going to talk
	...

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