President Trump signed a sweeping policy bill on July 4 that includes various tax provisions affecting Americans’ finances. The new law extends lower tax rates for wealthier taxpayers and introduces deductions and benefits for middle-class families and seniors. Key changes include raising the state and local tax deduction cap to $40,000 and extending a $750,000 limit on mortgage interest deduction.

Older, middle-income Americans will see a $6,000 boost to their standard deduction from 2025 to 2028. The law also introduces new, tax-advantaged investment accounts for children born between 2025 and 2028. A key highlight is the provision allowing workers to deduct up to $25,000 in tips from their taxable income through 2028.

Trump’s tax bill introduces a new above-the-line deduction for workers to deduct up to $12,500 worth of overtime pay from their income taxes. The bill also made the Qualified Business Income (QBI) deduction permanent, allowing eligible self-employed taxpayers and small business owners to deduct up to 20% of qualifying business income on their federal income taxes.

The legislation expands how tax-advantaged 529 plans can be used for K-12 education costs, allowing parents to withdraw up to $20,000 annually for K-12 tuition and widening the definition of qualified expenses. Additionally, HSA funds can now be used for concierge medical services and telehealth, and the child tax credit has been increased to $2,200 per child under 17.

Adoptive parents can now claim a maximum credit of $17,280 per child, with $5,000 being refundable, for qualified adoption expenses. The law also allows a deduction of up to $10,000 in annual interest from a loan used to purchase a new car, SUV, truck, or motorcycle. Other provisions made permanent include lower tax rates and standard deduction amounts.

Read more at Yahoo Finance: How the big, new tax law affects your money