H.R. 1 - The Big Beautiful Bill (Simplified) - Part 11.2 - Taxes - Working Families and MAGA Accounts
It's long, it's complicated, and Marjorie Taylor Greene (and probably most people she works with) hasn't read it. Let's not be one of those people. Here is a simplified version of a very complex, and very dangerous bill, that's easy to read and something we can all understand. Please share with friends and family. Thank you.
TITLE XI -- COMMITTEE ON WAYS AND MEANS, "THE ONE, BIG, BEAUTIFUL BILL"
PART 2 - ADDITIONAL TAX RELIEF FOR AMERICAN FAMILIES AND WORKERS
110101 - NO TAX ON TIPS
Sections 6041, 6050, and 6051 of the Internal Revenue Code of 1986 are amended to state that if you make less than $80,000/year you can deduct your tips from service jobs, such as restaurants, hospitality, and the beauty industry, as long as you have a social security number. If you do not have a social security number, meaning you are likely undocumented, you will have to pay the full taxes on your tips.
110102 - NO TAX ON OVERTIME
Section 225 is amended so that all non-exempt employees (i.e. not salaried or C-suite) can deduct overtime pay, but only the portion that is over their regular wage. For example, if you make $10/hour and for overtime you make $15/hour, you can only deduct $5/hour. This does not apply to anyone making over $80,000/year or who does not have a social security number. Thus undocumented workers will still be taxed on overtime pay.
110103 - ENHANCED DEDUCTION FOR SENIORS
Section 63 is amended to state that all seniors (age 65 or older) making $75,000 or less for single filers, and $150,000 or less for married filing jointly, are eligible for a $4000 deduction. This will not benefit low-income seniors who pay very little income tax, and is set to expire in 2028.
110104 - NO TAX ON CAR LOAN INTEREST
Section 163 states that you can deduct up to $10,000 on car loan interest from 2025 to 2028, but does not specify if this is the total amount for the 4 taxable years or if it is per year. You will not qualify if you make over $100,000 as a single filer, $200,000 filing jointly, or if your car was not assembled in the United States.
110105 - ENHANCEMENT OF EMPLOYER-PROVIDED CHILD CARE CREDIT
Section 45 is amended so that businesses can increase their child-care credit from 25% to 40% (50% for small businesses that make less than $31 million/year) and up to $500,000 (i.e. if the company spends $1.25 million on child care for employees they will receive the whole $500,000 credit).
110106 - EXTENSION AND ENHANCEMENT OF PAID FAMILY AND MEDICAL LEAVE CREDIT
Section 45 is further amended to make permanent the Paid Family and Medical Leave (PFML) tax credit set to expire in 2025, which allows employers to claim wages paid to employees while on leave, as long as they don't make more than $96,000 (after which the employee is ineligible for PFML). This amendment will lower the employee eligibility work requirement for compensation from 1 year to 6 months.
110107 - ENHANCEMENT OF ADOPTION CREDIT
Section 23 is amended to state that up to $5000 of an adoption tax credit (which caps out at $16,810) can be refundable, but cannot be carried forward. Fees for domestic and international adoption typically range from $25,000 to $70,000 through an agency, and up to $40,000 for private adoptions.
110108 - RECOGNIZING INDIAN TRIBAL GOVERNMENTS FOR PURPOSES OF DETERMINING WHETHER A CHILD HAS SPECIAL NEEDS FOR PURPOSES OF THE ADOPTION CREDIT
Section 23 is further amended to give Native American Tribes the same ability as state governments to determine if a child has special needs when considering the adoption tax credit.
110109 - SCHOLARSHIP GRANTING ORGANIZATIONS
Section 117 is amended to allow businesses and individuals to receive up to a $5000 tax credit for donating to scholarship programs at private or religious elementary and secondary schools, as long as the students don't come from homes that make over 300% of the median gross income for their area.
110110 - ADDITIONAL ELEMENTARY, SECONDARY, AND HOME SCHOOL EXPENSES TREATED AS QUALIFIED HIGHER EDUCATION EXPENSES FOR PURPOSES OF 529 ACCOUNTS
Section 529 is amended to expand current 529 savings plan tax-advantaged accounts (state-sponsored savings plans to help save for future education expenses) to be used for curriculum, tutoring, and testing related to public, private, religious, or home schooling.
110111 - CERTAIN POSTSECONDARY CREDENTIALING EXPENSES TREATED AS QUALIFIED HIGHER EDUCATION EXPENSES FOR PURPOSES OF 529 ACCOUNTS
Section 529 is also amended to expand current 529 savings plan tax-advantaged accounts to be used for postsecondary (after high school) expenses. This, however, could impact a student's eligibility for need-based financial aid.
110112 - REINSTATEMENT OF PARTIAL DEDUCTION FOR CHARITABLE CONTRIBUTIONS OF INDIVIDUALS WHO DO NOT ELECT TO ITEMIZE
Section 170 is amended to allow those who don't itemize (subtract eligible expenses from Adjusted Gross Income (AGI)) to deduct up to $150 for single filers and $300 for married filing jointly for charitable donations. This is significantly lower than the Charitable Act, which was introduced in the Senate in 2025, which would allow for $1000 and $2000, respectively.
110113 - EXCLUSION FOR CERTAIN EMPLOYER PAYMENTS OF STUDENT LOANS UNDER EDUCATIONAL ASSISTANCE PROGRAMS MADE PERMANENT AND ADJUSTED FOR INFLATION
Section 127 is amended to make permanent the provision that allows the first $5,250 of employer-provided educational assistance to be excluded from an employee's taxable income.
110114 - EXTENSION OF RULES FOR TREATMENT OF CERTAIN DISASTER-RELATED PERSONAL CASUALTY LOSSES
This makes permanent section 304(b) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, which states that losses due to disaster do not need to exceed 10% of your income, and taxpayers do not need to itemize in order to receive tax relief.
110115 - TRUMP (MAGA) ACCOUNTS
This provision creates "Money Accounts for Growth Advancement (MAGA)," savings accounts for children under the age of 8 to which their parents and relatives can contribute up to $5000 a year, while private foundations do not have a limit. The recipient may withdraw up to half the funds at age 18, but only for education, training, small-business loans, or to buy a house. They may withdraw the entire amount for any purpose at age 30. To be eligible, the child must be a U.S. citizen and at least one parent must provide their social security number.
110116 - TRUMP (MAGA) ACCOUNTS PILOT PROGRAM
This provision uses the MAGA as a pilot program, and the federal government will contribute $1000 to all savings accounts for babies born in Trump's second administration, managed by banks or investment firms, and immediately invested in the stock market on their behalf. Babies given a social security number at birth would be automatically enrolled, and parents or third-parties can contribute up to $5000 a year. The money can only be withdrawn for buying a home, for education-related expenses, or for starting a small business until the age of 30. Half the funds can be withdrawn at 18, but if money is misspent a 10% penalty will apply. If your family member or private contributor cannot afford to add to the account in order to pay for aforementioned expenses, you will not be able to withdraw the money until after age 30, when it can be used for any purpose.
If you would like to read the bill yourself, click the link below.
The Big, Beautiful Bill
Ellie is an author, editor, and owner of Red Pencil Transcripts, and works with filmmakers, podcasts, and journalists all over the world. She lives with her family just outside of New York City.
I’ve just read through this. Thank you Ellie.
It’s great how easy your summaries make it to get a frame of reference and the key areas affected and how.
We face the Big Beautiful Bill in Congress. We need to let each of our representatives and senators know we oppose a vote for this bill (in any of its forms with the 2017 tax cut). Let them know that you will not ever get over it if they vote for the bill.
https://hotbuttons.substack.com/p/big-beautiful-bull?r=3m1bs