President Donald Trump’s new tax bill cuts the income tax liability for many Americans.
Altogether, roughly 40% of U.S. households could pay $0 in federal income tax in 2025, according to the Tax Policy Center (1). Similarly, 40% of households had a $0 federal tax bill in 2022, under the Biden administration. However, Trump’s tax cuts favor specific groups, which means some Americans may see a $0 tax bill for the first time (2).
Here’s a closer look at who will come out ahead.
Who can eliminate their tax bill?
Trump’s One Big Beautiful Bill Act (OBBBA) specifically favors seniors, employees earning tips and overtime, and those with children.
Here’s an example: Casey and Riley earn a combined income of $100,000 and have two children under the age of 13. Their usual deductions allow them to lower their taxable income considerably, with $31,500 in standard deductions, $6,800 in 401(k) contributions, $6,800 for health insurance premiums, $1,260 for a Health Flexible Spending Account (FSA) and $3,000 for a Dependent Care Flexible Spending Account (DCFSA).
But the new bill adds another deduction to this list: overtime pay. Casey and Riley can deduct an additional $10,000 because of this.
After all deductions and subtractions from their total income, they net out at $40,640, leaving them with a $4,400 tax liability. However, Casey and Riley could also receive the maximum child tax credit of $2,200 per child, which is up from $2,000 last year. The combined tax credit of $4,400 would offset the amount they owe in taxes and leaves them effectively with a $0 bill.
Similarly, a retired couple who are both 66 years old and earning a combined adjusted gross income of $96,700 could reduce their taxable income by $34,700 under the existing standard deduction. The OBBBA’s new seniors deduction, worth $6,000 each or $12,000 together, decreases their combined taxable income to $50,000 (3).
Because the remaining $50,000 is derived from capital gains and qualified dividends, it would be subject to a 0% tax rate (4). All in all, the senior couple could pay $0 in federal income tax.
These are just some examples of how some families can eliminate their total liability by taking advantage of all the deductions and tax credits available to them. That said, individuals or households with higher income levels likely won’t be able to bring their tax bill down to $0.
High-income households can work with platforms like Range to further reduce their tax burden.
Range is a streamlined, cost-effective way to manage your entire financial life. They offer tax recommendations based on your prior year returns, and can evaluate your investment portfolios for tax loss harvesting opportunities, too.
Beyond taxes, Range also offers investment advisory services. While traditional advisors can charge fees from 0.5% to 2% of your total assets under management (AUM), or between $1,000 to $3,000+ for more comprehensive plans, Range offers flat-fee pricing with 0% AUM fees. That’s a fraction of what you’d pay with a typical CFP. You can even book a free demo with the Range team after answering a few quick questions about yourself and what you’re looking for from their experts.
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If your net worth is below the thresholds required to work with Range, there are other advisors who might be better suited to find the best path for reducing your tax burden.
For instance, with Advisor.com, you can connect with a financial advisor suited to your needs and based in your area. All of their advisors are pre-vetted fiduciaries, meaning that they have a legal obligation to act in your best interest.
After inputting your ZIP code to get matched with a nearby financial professional, you can set up a free call with no obligation to hire to make sure they’re a good fit for you.
Caveats to keep in mind
Although many Americans are expected to benefit from the new tax rules, there are several caveats to consider.
For instance, a $0 federal tax bill doesn’t necessarily mean your tax liability is nil. You could still face federal payroll taxes – like those which are automatically withheld from your paycheck — including Social Security and Medicare tax. Then there’s state and local income taxes, as well as sales and property taxes, some of which could in turn rise to offset the federal tax cuts. According to the National Association of Counties, the OBBBA shifts the cost burden from the federal level to state and local levels, which means counties may have to either cut services or raise local taxes to offset the downstream impact (5).
It should also be noted that the Trump administration has cut income taxes while raising import taxes, more commonly known as tariffs. Tariffs announced through Oct. 3 could cost each taxpayer an additional $2,800 in 2026, according to calculations by the Tax Policy Center (6).
Read more: Robert Kiyosaki warns of a ‘Greater Depression’ coming to the US — with millions of Americans going poor. But he says these 2 ‘easy-money’ assets will bring in ‘great wealth’. How to get in now
Tax-advantaged investments
Bottom line: The national tax code has been significantly overhauled, and a professional financial expert could help you estimate the total tax burden you and your family face this year — it’s likely to be different from what you’re used to.
And while you can’t predict how tax policies can change, you can make decisions around your wealth to help protect it.
For instance, when you open a gold IRA, you can defer your tax bill until you withdraw during retirement. That means your investment can grow tax-free in the meantime.
Opening a gold IRA with Priority Gold allows you to invest in gold and other precious metals in physical forms while taking advantage of the tax benefits of an IRA.
Precious metals IRAs allow investors to hold physical gold, silver or other related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold and silver, making it an option for those looking to help shield their retirement funds against economic uncertainties.
When you make a qualifying purchase with Priority Gold, you can receive up to $10,000 in silver for free.
You can also protect your wealth by investing in real estate in order to benefit from depreciation.
As real estate assets suffer from wear and tear over time, investors can deduct the value of depreciation from their taxable income. And you don’t need to buy property outright in order to tap into this tax benefit either.
For instance, with First National Realty Partners (FNRP), accredited investors can diversify their portfolio through grocery-anchored commercial properties, without taking on the responsibilities of being a landlord. In doing so, investing with FNRP means you might be able to lower the taxable income on your share of an investment.
With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to Triple Net (NNN) leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns.
You can also use a Self-Directed IRA (SDIRA) to invest with FNRP, meaning your rental income gains can grow tax-deferred so you can maximize your retirement savings.
Simply answer a few questions — including how much you would like to invest — to start browsing their full list of available properties.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Tax Policy Center (1); Tax Policy Center (2); Wall Street Journal (3); U.S. Internal Revenue Service (4); National Association of Counties (5); Tax Policy Center (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.