What You Don't Know About the Big Beautiful Bill Could Cost You

What is OBBBA?

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, making tax provisions that were scheduled to expire at the conclusion of 2025 permanent under the law. The OBBBA directly impacts your tax situation, your retirement, funding and paying for education, and your estate planning. Here are a few important provisions that may benefit you and your family.

What Might Affect Me?

•             Tax Brackets & Standard Deduction: The standard deduction for 2025 is $15,750 or $31,500 for single or joint filers.  For 2026, it is $16,100 or $32,200 for single or joint filers.

•             Estate & Gift Tax: Federal lifetime estate and gift tax exemption will remain the same rather than sunsetting at the end of 2025. Beginning in 2026 the federal estate, gift and generation-skipping (GST) tax exemption is set at $15 million per individual, with married couples eligible to combine their exemptions for a total of $30 million. If you previously did taxable estate planning and are below these new thresholds, you may consider revisiting your previous trust planning for smoother updates.

•             New Senior Deduction: If you are 65 or older from 2025-2028, you can deduct $6,000 or $12,000 for single or married taxpayers. This is in addition to the standard deduction. There is a phase out starting at $75,000 or $150,000 Modified Adjusted Gross Income (MAGI) for single or joint filers.

•             SALT Deduction: The State and Local Tax (SALT) deduction cap increases to $40,000 in 2025, with a 1% annual increase until 2029, reverting to $10,000 in 2030. If you're paying lots of state taxes, there may be a benefit to itemizing deductions, subject to MAGI limits.

•             New Trump Account: Newborns born between 2025 and 2028 can receive an initial $1,000 government contribution to start their savings journey. These funds are not accessible until age 18, but annual contributions of $5,000 are permitted without income requirements or phase out limitations.

•             Other OBBBA Considerations Include: Child Tax Credit, 529 Plan and ABLE-Account Enhancements, Charitable Giving, Qualified Opportunity Zones, Qualified Business Income Deduction, No Tax on Tips and Overtime (2025-2028), Student Loan changes, and Auto Loan Interest Deductions (2025-2028).

Why Planning Matters: You’re Not Alone

The good news? You don't have to navigate these changes by yourself. Partnering with qualified professionals in elder law and financial planning who stay current on tax law changes can help you feel confident about your estate planning and financial decisions to maximize your opportunities.

For educational purposes only. This is not legal advice.