As you are likely aware, earlier this year legislation commonly known as the One Big Beautiful Bill (“OBBBA”) was enacted. The bill includes quite a number of provisions impacting individual and corporate tax rules that either are new provisions or retain changes originally made in the 2017 Tax Cuts and Jobs Act (“TCJA”). Some of the changes are “permanent” (until they are changed) whereas others are temporary and scheduled to sunset/phase out in a few years.
While the OBBBA is incredibly dense, we wanted to highlight a few of the key provisions in the table below. Given the breadth of this legislation, please reach out with any specific questions you may have about the bill and its impact on your family.
| Topic | Key Changes |
|---|---|
| Individual Income Tax Rates | Makes “permanent” the lower tax brackets established in the TCJA. |
| Estate & Gift Tax Exclusion (Federal) | Permanently increased to $15 million per individual ($30 million for a married couple and increased for inflation after 2025). This avoids the scheduled sunsetting back to $7 million as planned under the TCJA. The GST exemption amount was similarly adjusted. |
| Standard Deduction | Increases to the standard deduction established in the TCJA are made “permanent”. |
| Limits to Deductions for Charitable Giving | Beginning in 2026, taxpayers that itemize deductions on their tax returns may only deduct their charitable contributions that exceed 0.5% of their adjusted gross income. Those that don’t itemize deductions may deduct up to $1,000 individually in cash contributions. |
| S.A.L.T. Deduction | For the years 2025–2029, increases the SALT deduction to $40,000 (with 1% increases each year after 2025) from the previously established $10,000 cap. The increase phases out at certain income levels. |
| Qualified Small Business Stock (QSBS) Gains | Makes a number of meaningful changes aimed at increasing the potential benefit of holding QSBS-eligible shares, including: (i) raising cap from $10 million to $15 million, (ii) reducing the holding period required for QSBS eligibility including a tiered schedule over a 3-, 4-, and 5-year period, and (iii) increasing asset ceiling for company eligibility from $50 million to $75 million. The new rules apply to QSBS-eligible shares received after July 4, 2025. |
| New Deductions for Wage Earners | Individuals who earn either qualified overtime pay or tip income may deduct a portion of this income on their tax returns. |
| Home Mortgage Deduction | Makes permanent the $750,000 limit of mortgage balances for which mortgage interest is deductible. The OBBBA eliminates the reversion to the $1 million cap. |
| “Trump” Accounts for Children | Eligible children born 2025–2028 may receive a one-time $1,000 contribution to a “Trump” account. These new accounts are similar to IRAs and, in most cases, cannot be accessed before age 18. |
| Use of 529 Plan Funds for K–12 Education | Increases from $10,000 to $20,000 the amount of 529 plan assets that can be used to fund K–12 educational expenses (subject to limitations or restrictions at the state level). The definition of qualified higher education expenses is also expanded to foster broader educational/employment paths. |
| Small Business Investments | Increases the maximum amount deductible under Section 179 from $1 million to $2.5 million. Re-establishes the 100% bonus depreciation allowed for qualified property purchased and placed into service after January 9, 2025. |
Changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, we are not qualified to render formal advice on tax or legal matters. You should consider seeking tax and/or legal counsel before making any decision related to this information.