Well, it finally happened—the House just passed the proposed "Big Beautiful Bill Act" (🤦‍♂️ yes...that's the name...) by a razor-thin margin of just one vote. The name might make you chuckle (or cringe), but the potential impact on your finances is no joke.

These are still proposals, not law yet. It still needs to go through the Senate, and we can expect important changes.

But knowing what's coming helps you stay ahead of the curve. Here's what matters most for optometrists:

Tax Changes: Mostly Great News for Practice Owners

The Tax Cuts and Jobs Act is set to sunset at the end of 2025, and we've been waiting to see which tax laws we're working with for next year and beyond.

Several important tax provisions - like the lower tax rates and the QBI deduction - were set to end and go back to old 2017 tax laws.
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But these proposals would extend and sweeten key benefits:

The Big Wins For ODs:

• QBI deduction jumps from 20% to 23% and becomes permanent—with new favorable calculations specifically for high-earning optometry practices and other specialized service businesses. Under current rules, higher-earning ODs phase out of the deduction altogether.
• 100% bonus depreciation restored—huge win for equipment and rental property purchases where cost segregation studies are involved.
• Tax brackets stay put (10% to 37%) "permanently". Meaning, until another Congress changes them.
• Standard deduction rises to $30,000 for married couples filing jointly, $15,000 for single filers, with potentially higher standard deductions for those 65+.

Other Notable Changes:

• Child Tax Credit increases to a higher $2,500 per child under 17 from 2025-2028, then back to $2,000 per child, with adjustments for inflation. It was set to go to $1,000 after this year.
• SALT cap relief: State and local taxes have been limited to a $10,000 deduction since 2018. The deduction limit rises from $10,000 to $30,000 (with higher earners phasing down to the old limit)..
• End of the PTET workaround: New restrictions likely kill this popular state-level strategy.
• Estate tax exemption increases to $15 million per person ($30 million per couple) and are made "permanent".
• HSA contributions doubled with income phaseouts. Also adds more flexibility for health-related savings and ability to avoid common eligibility traps commonly tripped over.
• 529 plans expanded to cover professional credentials (like specialty certifications).
• Deduction for auto loan interest, with income phaseouts.

The "Eh, Whatever" Category:

• "MAGA Savings Account": Government-funded child savings accounts, with a $1,000 initial funding by the government. A nice gesture, but with so many restrictions vs. just a taxable investment account it's not likely to be incredibly useful.

Student Loan Changes: Brace Yourself

Here's where things get interesting (and not necessarily in a good way):

What's Getting Eliminated:

• PAYE, SAVE, and ICR plans get the boot - current borrowers would choose between:
  • a modified Income-Based Repayment plan - essentially the Old IBR. The payment uses 15% of discretionary income, no payment caps, and 25 years until forgiveness, or
  • the new RAP option
• Medical/dental residencies no longer count toward Public Service Loan Forgiveness

What Replaces Them:

• New Repayment Assistance Plan (RAP): An effort to clean up the many IDR plans into one. It has graduated payments from 1% to 10% of your AGI, based on your income income, though ODs are likely to see 10%.
• Current IDR plans use 10%-15% of "discretionary income", which is your AGI/income minus an amount based on the federal poverty line.
• Forgiveness after 30 years, but enrolling is like checking into Hotel California: you can never leave.
• Also includes other provisions, like unpaid interest to be waived.
• New borrowers after June, 2026, would only have this option as an income-driven repayment plan. The other alternative is a standard repayment plan.

Other Key Changes:

• Parent PLUS loans capped at $50,000 lifetime limit
• IDR loan forgiveness becomes taxable again (though PSLF stays tax-free)
• Grad PLUS loans and unsubsidized graduate loans eliminated for future borrowers
• Professional graduate loans limited to a $150,000 total
• Employer loan assistance extended: Up to $5,250 annually remains tax-free
• Loan Discharge for Death or Disability continues to be tax-free

The Bottom Line

The proposed tax changes look quite favorable, especially for practice owners who can leverage QBI deductions and depreciation benefits. The student loan changes? Less so—but being prepared beats being surprised.

I'll keep monitoring this closely and provide actionable insights as things develop. I'm expecting major changes as the Bill goes through the Senate - especially for the student loan provisions.

My hope is that you - current borrowers - will be grandfathered into the student loan IDR options and rules that you agreed to when you took out your loans. This would allow you to keep eligibility for New and Old IBR and PAYE, depending on when you first took your loans.

For now, take a deep breath, enjoy your weekend, and know you're ahead of the curve.

Questions? Hit reply - I read every email and love hearing from you.

Have a great weekend!

New From our Education Hub

Podcast Ep. 135: An OD's Guide to Factor-Based Investing I provide a guide for optometrists on the basics, history, and research behind factor-based investing. Listen to the Episode

Podcast Ep. 136: Creating a More Holistic Integrative Healthcare Patient Experience Evon is joined by Dr. Neda Gioia, OD, to dive into how she added a holistic, integrative healthcare approach to her optometry practice. Listen to the Episode

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