July market news was dominated by the One Big Beautiful Bill Act (OBBBA), which was signed into law by President Trump on July 4th. From taxes to everyday finances OBBBA introduced many changes that will impact individuals and families.
We’ll devote most of our attention to some specific provisions of OBBBA, but first a brief market update: July was generally a positive month for both news and market returns. Both the S&P 500 and NASDAQ Composite Index reached new highs. Looking forward, we are keeping a close eye on markets as a new round of tariffs is set to begin in early August.
Wrapping up returns for the month of July, the Dow Jones Industrial Average features a modest gain of 36 points (0.08%), the S&P 500 grew by 134 points (2.17%) and the NASDAQ was up 753 points (3.7%).
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The Big Beautiful Bill: Key Changes to Know
The One Big Beautiful Bill Act is an extensive piece of legislation, but our goal is to cut through the complexity. Here, we highlight some of the most impactful changes we believe are essential for you to be aware of and when they go into effect.
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Expanded 529 Plans – Starting NOW and in 2026:
Originally designed for college tuition, 529 plans, named after Section 529 of the Internal Revenue Code, have expanded. Starting now, 529 funds can be used to cover postsecondary vocational credentialing costs, including tuition, books, and exam fees for professional degrees and certifications like CFP and CPA designations. Starting in 2026, K-12 qualified expenses will expand beyond tuition to include workbooks, textbooks, standardized exam fees, online programs, tutoring, dual enrollment, and educational therapies for disabled students. And in 2026, the annual tax-free withdrawal limit for K-12 expenses has also doubled from $10,000 to $20,000 per beneficiary.
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Senior Tax Breaks – Starting NOW:
The law gives an additional $4,000 tax break to taxpayers aged 65 and older below a certain income threshold. This is stacked on top of the regular standard deduction ($15,750 for single filers or $31,500 for married couples filing jointly in 2025) PLUS an already existing $2,000 deduction for seniors.
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Solidified and Increased Child Tax Credit – Starting NOW:
The new tax and spending law expanded and made permanent the Child Tax Credit, which was set to expire at the end of this year. The revised Child Tax Credit will increase $200-per-child to $2,200. Additionally, the Child Tax Credit will increase in future years, based on inflation.
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New Trump Child Accounts – Starting NOW:
The bill establishes Trump Child Accounts, a new tax-deferred savings plan. Parents and grandparents can contribute up to $5,000 annually (inflation-adjusted) for a minor, with contributions not being tax-deductible. To kickstart the program, the federal government will provide a $1,000 contribution for every U.S. citizen born between 2025 and 2028 upon request. These accounts don’t permit withdrawals before the age of 18. Between the ages of 18 and 591/2 the distributions must be for qualified expenses—higher education expenses, small business or small farm expenses, or up to $10,000 for a first home purchase—to avoid penalties. Funds in Trump accounts can only be invested in mutual funds or an ETF that “tracks the returns of a qualified index,” and “does not have annual fees and expenses of more than 0.1 percent of the balance of the investment in the fund.”
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Student Loan Changes – Staggered Dates:
The loan changes are complex and there are a variety of dates to be aware of. After years of pauses and periods of forbearance, the White House now requires all borrowers to begin repaying their loans by the end of Trump’s second term. The options for borrowers have reduced to only two options for repayment. The legislation only leaves borrowers with a standard repayment plan, which includes 10 to 25 years of repayments depending on the loan amount, and a new Repayment Assistance Plan (RAP), which takes into account a person’s income but lengthens the amount of time spent on repayment. The SAVE, PAYE, and Income-Contingent Repayment (ICR) plans will be phased out for new borrowers. Existing borrowers (with loans taken out before July 1, 2026) must switch to the new Income-Based Repayment (IBR) or Repayment Assistant Plan (RAP) by July 1, 2028, or they will be auto-enrolled in RAP. Read more here to see a full list of the changes and effective dates: https://www.savingforcollege.com/article/student-loan-changes-one-big-beautiful-bill
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As always, if you have questions about how the changes may impact your finances, please don’t hesitate to reach out to us.
Sources:
https://thehill.com/business/5381924-trump-tax-cuts-bill-breakdown/
https://www.morningstar.com/indexes/spi/spx/performance
https://www.morningstar.com/indexes/dji/!dji/performance
https://www.savingforcollege.com/article/student-loan-changes-one-big-beautiful-bill
https://www.aarp.org/money/taxes/what-to-know-new-tax-law-2025
The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Lincoln Investment. These views are as of August 4, 2025 and are subject to change based on subsequent developments. The material presented is provided for informational purposes only. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Nothing contained herein should be construed as a recommendation to buy or sell any securities. As with all investments, past performance is no guarantee of future results. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss. The Dow Jones Industrial Average is a widely watched index of 30 American stocks thought to represent the pulse of the American economy and markets. The Nasdaq Composite is an index of securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The S&P 500 index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market. It is not possible to invest directly in an index.