President Donald Trump’s new tax bill cuts income tax liability for many Americans, with approximately 40% of U.S. households projected to pay $0 in federal income tax by 2025. The bill favors specific groups, such as seniors, employees earning tips and overtime, and those with children. Families are utilizing various deductions and credits to reduce their tax liability to $0, including a retired couple who could pay $0 federal income tax due to capital gains and qualified dividends. However, higher-income households may not be able to reduce their tax bill to $0. The bill may shift costs to state and local levels, potentially leading to increased taxes in some areas. Additionally, the Trump administration’s tariff policies could raise families’ federal tax burden by an average of $2,100 in 2026. While many Americans may benefit from the new tax rules, professional financial advice may be beneficial in understanding and managing tax liabilities.

Read more at Yahoo Finance: Trump tax law could help millions of Americans pay $0 in federal income tax. Who qualifies and how to get it in 2026