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What are “Trump Accounts”?

Introduced in the One Big Beautiful Bill Act (OBBBA), these are governmentfunded investment accounts designed to help children build wealth from birth. Children born between January 1, 2025, and December 31, 2028, who are U.S. citizens and have a Social Security number, are eligible to receive a one-time $1,000 deposit from the U.S. Treasury to start the account. Children born outside these four calendar years are also eligible for an account, but they won’t receive the $1,000 in government seed money.

MAKING CONTRIBUTIONS

Parents, grandparents, and other individuals can make after-tax contributions of up to $5,000 per year to each account. Employers may also contribute up to $2,500 a year to accounts for their employees’ dependents. Any employer contributions also count toward the overall $5,000 cap. The contributions grow tax-deferred until withdrawn. Account investment options are limited to mutual funds* or exchange-traded funds that track a qualified index, such as the S&P 500.

EDUCATION PLANNING

Beginning the year the child turns 18, they can make penalty-free withdrawals for qualified educational costs. The child will incur regular income tax on earnings and tax-free contributions from the government and employers. Still, all after-tax contributions made by parents and others can be withdrawn tax-free. After age 18, the account functions similarly to a Traditional IRA, with continued tax-free growth and the ability to withdraw funds for any purpose starting at age 59-1/2.

Opening an account makes sense if your child is eligible for the $1,000 seed money. It may also be worth considering if your employer is willing to contribute to your child’s account. Accounts can be opened beginning July 4, 2026. More guidance from the Treasury is expected before then.

*Investors should carefully consider the investment objectives, risks, charges, and expenses of the fund before investing. Contact the issuing firm to obtain a prospectus, which should be read carefully before investing or sending money. Because mutual fund values fluctuate, redeemed shares may be worth more or less than their original value. Past performance won’t guarantee future results. An investment in mutual funds may result in the loss of principal.

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OBBBA and Alternative Minimum Tax

Initially designed to ensure that high income earners who benefit from various deductions and credits still pay a minimum level of tax, the Alternative Minimum Tax (AMT) is imposed at a flat rate tax of 26% or 28%. The 28% applies to taxpayers filing jointly with $244,500 or more AMT income (AMTI) and $122,500 or more for other taxpayers. You’ll be subject to AMT if your tax calculated under the AMT rules is higher than your tax calculated under regular income tax rules.

Before the Tax Cuts and Jobs Act (TCJA), AMT had increasingly affected a broader range of taxpayers due to its different rules and exemption structure. TCJA reduced AMT exposure, but those relief measures shift under the One Big Beautiful Bill Act (OBBBA) starting in 2026. As you see in the table below, for 2025, the phaseout of the exemption that single taxpayers may claim before AMT is imposed at $626,350 in AMTI. For married couples filing jointly, the phase begins at $1,252,700 AMTI.

Starting in 2026, however, OBBBA resets the exemption phase-out thresholds to the TCJA’s $500,000 and $1 million AMTI, with annual inflation adjustments for 2026 and beyond. So, for 2026, these phaseout thresholds will be lower than in 2025. More bad news: OBBBA also increases the exemption phase-out percentage from 25% to 50%. As a result, more high-income individuals may be hit with the AMT starting in 2026.

The AMT is complicated. Contact your tax professional to determine your status under the OBBBA changes.

*IRS Rev. Proc. 2025-32

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The One Big Beautiful Bill Act (OBBBA)

As you look back on 2025 and start planning your financial strategies for 2026, here’s a brief overview of provisions in the OBBBA that you may want to consider in that planning.

PERSONAL TAXES

OBBBA retains the reduced federal income tax brackets introduced in 2017, which were scheduled to expire in 2026, and sets the 2026 standard deduction at $15,750 for single filers and $31,500 for married couples filing jointly, with inflation adjustments expected in subsequent years.

For 2025, the federal child tax credit increases to $2,200 per child. It will be indexed for inflation in 2026 and later. This credit begins phasing out for single/head of household taxpayers and married filing jointly at $200,000 and $400,000 modified adjusted gross income (MAGI). As for your estate planning, the estate tax exemption rises to $15 million for 2026 (from $13.99 million in 2025) and will be indexed for inflation in future years.

A new deduction for interest paid on auto loans could let you write off a portion of your car loan interest. The deduction has income limits and strict rules on which cars qualify. The cap on state and local tax (SALT) deductions is temporarily increased from $10,000 to $40,000 from 2025 through 2029, with the cap rising 1% annually until it reverts to the previous $10,000 limit in 2030. The expanded cap phases out for filers earning more than $500,000 (married filing jointly) or $250,000 (single).

FOR BUSINESSES

OBBBA makes permanent the 20% small business deduction for pass-through entities such as partnerships and sole proprietorships. It makes permanent the lower corporate tax structure and rates set to expire in 2025, as well as 100% bonus depreciation and full expensing for business investments.

For more specific information on how the Act may affect you, talk with your trusted tax and financial professionals.