ChooseFI

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

18 snips
Jul 28, 2025
In this engaging discussion, Sean Mullaney, The FI Tax Guy and co-author on tax planning for early retirement, shares insights into the recently passed One Big Beautiful Bill. He and Brad delve into how extended tax rates and a higher standard deduction can benefit early retirees. They also highlight new charitable contribution deductions for non-itemizers and introduce a $6,000 senior deduction for those 65 and older. Plus, strategies for maximizing premium tax credits starting in 2026 are explored, making this a must-listen for financial independence enthusiasts.
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INSIGHT

Permanent Tax Cuts Benefit FI

  • The 2017 Tax Cuts and Jobs Act's lower tax brackets and higher standard deduction are now permanent, removing the 2026 sunset threat.
  • This permanence provides financial independence planners with more certainty and removes the urgency for rush Roth conversions.
ADVICE

Favor Traditional Contributions Now

  • Use traditional 401k or IRA contributions to reduce taxable income and benefit from the higher standard deduction.
  • This approach may be more advantageous than Roth contributions during working years given current tax law.
INSIGHT

Charity Deduction Shift in 2026

  • Starting in 2026, non-itemizers can deduct up to $1,000 (single) or $2,000 (married) in cash charitable contributions.
  • Conversely, itemized deductors face a new 0.5% AGI floor reducing their charitable deductions, shifting benefits toward non-itemizers.
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