On July 4, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law, a comprehensive tax and spending package totaling nearly 900 pages. This landmark legislation introduces approximately $4.5 trillion in tax cuts, shifts federal spending priorities, and directs substantial resources toward border security and national defense.

The bill’s broad scope means it will likely impact a wide range of Americans, including business owners, retirees, and high-income earners. If you're aiming to minimize your tax liability or fine-tune your financial approach, understanding the core elements of the OBBBA will be key to navigating what’s ahead.

Here's a breakdown of the most important updates.

Permanent Extension of Key Tax Measures under the One Big Beautiful Bill Act

A major component of the OBBBA is the indefinite extension of several tax provisions first introduced in the 2017 Tax Cuts and Jobs Act (TCJA). For high-income individuals, families, and business owners, these changes present a mix of new opportunities and complexity, making strategic tax planning even more essential.

Below is a summary of the updated provisions and how they may influence your financial plan:

Individual Tax Rates Made Permanent

The reduced income tax brackets introduced under the TCJA were initially set to expire after 2025. However, the OBBBA locks in those rates—10%, 12%, 22%, 24%, 32%, 35%, and 37%—on a permanent basis, unless future legislation dictates otherwise.

Revised Family Tax Benefits

The OBBBA introduces several important changes to tax provisions that affect families, including enhancements to the standard deduction and child-related credits.

• The expanded standard deduction is now permanent, increasing in 2025 to $15,750 for single filers and $31,500 for those filing jointly.
• The child tax credit, which was previously set to revert to $1,000 per child in 2026, will instead rise to $2,200 starting in 2025. Future increases will be indexed to inflation. However, more stringent income thresholds may reduce eligibility for some higher- earning households.
• The legislation also includes a modest boost to the child and dependent care credit, offering slight relief to working families with caregiving expenses.

Increased AMT Thresholds

The OBBBA reduces the likelihood that high-income taxpayers will be subject to the alternative minimum tax (AMT). It maintains the higher exemption and phaseout thresholds, which will reset in 2026 to the inflation-adjusted levels from 2018: $500,000 for single filers and $1 million for joint filers.

Beginning in 2026, the phaseout rate also increases from 25% to 50%, which means the AMT exemption will phase out more quickly once income surpasses the applicable threshold.

Higher Estate and Gift Tax Exemption Made Permanent

The OBBBA reverses the scheduled reduction in the federal estate and gift tax exemption, which was expected to fall from $13.99 million in 2025 to about $7.1 million in 2026. Instead, the new law permanently sets the exemption at $15 million per individual, with future adjustments indexed to inflation.

This update significantly lowers the number of estates subject to federal estate tax and offers high-net-worth individuals and families more flexibility to transfer assets in a tax-efficient manner over the long term.

Permanent Qualified Business Income (QBI) Deduction

Under the OBBBA, the Section 199A deduction is now permanent, allowing owners of pass- through entities—including LLCs, S Corporations, and sole proprietorships—to continue to benefit from the 20% qualified business income (QBI) deduction. This offers an ongoing tax advantage for many business owners.

Temporary Increase to SALT Deduction Cap

The OBBBA raises the cap on the state and local tax (SALT) deduction to $40,000 starting in 2025. The increased SALT deduction begins to phase out at $500,000 of income and is fully reduced to the original $10,000 cap once income exceeds $600,000.

The cap will increase by 1% per year through 2029 before reverting to the original $10,000 limit in 2030. This temporary expansion offers notable relief for taxpayers in high-tax states such as California, New York, and New Jersey, where the SALT cap has been a longstanding concern.

How the One Big Beautiful Bill Act Affects Retirees and Charitable Giving

The One Big Beautiful Bill Act introduces several important changes that impact retirees and those who give to charity, while also preserving some existing provisions that remain relevant to long-term planning.

No Changes to Social Security Taxation, but New Exemption for Seniors

Despite earlier rumors, the OBBBA does not alter the taxation of Social Security benefits. However, retirees may still benefit from reduced taxable income through an expanded standard deduction and the introduction of a new senior-specific exemption.

From 2025 through 2028, individuals aged 65 and older may be eligible for an additional $6,000 personal exemption. This exemption phases out based on income levels:

• For single filers, the phaseout begins at $75,000 of modified adjusted gross income (MAGI) and fully phases out by $175,000.
• For joint filers, the phaseout range runs from $150,000 to $250,000 MAGI.

These updates could provide meaningful tax relief for many retirees, particularly those drawing moderate income from retirement accounts or part-time work.

Premium Tax Credits Revert, but HSA Eligibility Expands

The expanded premium tax credits under the Affordable Care Act, introduced during the pandemic, are set to expire at the end of 2025. As of 2026, subsidy eligibility will return to the pre-2021 income thresholds.

According to KFF, this change could lead to an average 75% increase in premiums for enrollees, significantly impacting affordability for many households.

On the upside, beginning in 2026, all bronze and catastrophic plans on the ACA exchanges will be eligible for Health Savings Accounts (HSAs). This change creates new opportunities for early retirees and self-employed individuals to set aside pre-tax dollars for healthcare expenses.

New Charitable Giving Guidelines

Starting in 2026, taxpayers who claim the standard deduction will be able to deduct a portion of their charitable contributions through a new above-the-line deduction. The limits are:

• $1,000 for single filers
• $2,000 for joint filers

This deduction is available to all taxpayers, regardless of income level, but it does not apply to donations made to donor-advised funds.

For those who itemize, charitable contributions must exceed 0.5% of adjusted gross income (AGI) to qualify for a deduction. For example, if your AGI is $100,000, only donations above $500 would count toward your itemized deductions.

New “Trump Accounts” for Minors

Starting in 2026, a new savings option will be available for children under age 18. Known as “Trump Accounts,” these vehicles share similarities with Roth IRAs and come with several key features:

• Contributions are made with after-tax dollars, with a maximum of $5,000 per year.
• The federal government will provide a $1,000 contribution for children born between 2025 and 2028.
• Investments include low-cost, index-based mutual funds and ETFs.

These accounts aim to support long-term financial security from an early age. However, the rules around distributions are somewhat complex, and the overall benefit may vary depending on each family’s circumstances.

Temporary Tax Relief Measures for Workers (2025–2028)

Between 2025 and 2028, the OBBBA offers a series of temporary tax incentives designed to increase take-home pay for eligible workers:

Tip Income Exclusion. Workers can exclude up to $25,000 in tip income from federal taxable income. This exclusion phases out for single filers with modified adjusted gross income (MAGI) over $150,000 and for joint filers above $300,000.

Overtime Pay Exclusion. Individuals may exclude up to $12,500 in overtime earnings from taxable income, while joint filers can exclude up to $25,000. The same income phaseout rules apply.

Auto Loan Interest Deduction. Workers can deduct up to $10,000 in interest paid on auto loans, as long as the vehicle is assembled in the U.S. and the loan is issued after 2025. This benefit phases out for single filers earning more than $100,000 and joint filers earning more than $200,000.

What the One Big Beautiful Bill Act Means for You

The One Big Beautiful Bill Act introduces sweeping tax changes that will impact nearly every corner of the economy, from high-income earners and entrepreneurs to retirees and families. While this overview covers many of the most important updates, it’s only a snapshot of a much larger, nearly 900-page piece of legislation.

Not every provision in the new law will apply to your unique circumstances, which is why personalized guidance is so important. If you’re looking to understand how these changes could affect your financial picture and uncover opportunities along the way, now is the time to partner with a knowledgeable financial advisor. We’ll help you make sense of the updates, navigate the complexities with clarity, and build a forward-looking plan that reflects both your tax situation and your long-term goals. Contact us to learn more.