The One Big Beautiful Bill: Here's What It Means for Your Taxes.

Unless you've been completely off the grid, you've heard about the One Big Beautiful Bill Act — the sweeping legislation President Trump signed into law on July 4, 2025. It's one of the most significant tax overhauls since 2017, and parts of it can affect your 2025 taxes, meaning the return you file in 2026. From permanent rate changes to new deductions and planning opportunities, there’s likely something in it that touches your financial picture.

Here's a plain-English breakdown of what changed — and what it might mean for your financial picture.

The Tax Cuts from 2017 Are Now Permanent

The biggest headline: the lower tax rates and expanded standard deduction introduced under the 2017 Tax Cuts and Jobs Act were always meant to be temporary. They were set to expire at the end of 2025, which would have pushed millions of Americans into higher brackets. The OBBB changes that — those rates are now locked in permanently. For most people, that means no unwelcome tax surprise heading into 2026.

SALT Deduction Gets a Big Boost — For Now

If you live in a high-tax state, this one's for you. The cap on the State and Local Tax (SALT) deduction has been raised from $10,000 to $40,000 for incomes under $500,000. That's a meaningful change for homeowners in states like New York, California, or New Jersey who've felt the sting of that $10,000 limit for years. The catch: this provision runs through 2029, after which it reverts to $10,000 in 2030 — so don't build your long-term plan around it.

New Deductions for Certain Workers

For workers who earn tips or overtime, there are new deductions worth paying attention to. Through 2028, qualifying workers can deduct up to $25,000 in tips and up to $12,500 in overtime pay ($25,000 for joint filers). Both deductions phase out at higher income levels — specifically, at a MAGI above $150,000 for individuals and $300,000 for joint filers — but for middle-income earners who qualify, the savings are real.

There's also a new deduction for car loan interest. Through 2028, buyers of new, U.S.-assembled vehicles can deduct up to $10,000 in loan interest per year, provided the vehicle is for personal use. This phases out at $100,000 MAGI for single filers and $200,000 for joint filers.

A Bigger Break for Seniors

Retirees and near-retirees, take note. From 2025 through 2028, individuals 65 and older can claim an additional $6,000 deduction on top of the standard deduction — $12,000 for couples where both spouses qualify. It phases out for incomes above $75,000 (single) or $150,000 (joint), but for many retirees, it could meaningfully reduce taxable income over the next few years.

Families Get a Boost Too

The Child Tax Credit has been permanently increased to $2,200 per child and will be adjusted for inflation going forward. The OBBB also created a new type of savings account called a "Trump Account" — a tax-deferred account for children, similar in structure to an IRA, with a one-time $1,000 government contribution for newborns born between 2025 and 2028. Parents and employers can contribute up to $5,000 annually. It's worth keeping an eye on as the rules are still being finalized.

The Estate Tax Exemption Is Now Permanent

This is a big deal for anyone doing estate planning. The estate tax exemption — previously set to drop sharply after 2025 — has been made permanent at $15 million per person, or $30 million for married couples, indexed for inflation. If you've been holding off on updating your estate plan because of uncertainty around this number, that uncertainty is now largely resolved. It's a good time to revisit your documents.

Business Owners: Bonus Depreciation Is Back at 100%

If you own a business, 100% bonus depreciation has been fully restored and made permanent for qualifying property acquired on or after January 20, 2025. That means you can deduct the full cost of eligible equipment and assets in the year they're placed in service, rather than spreading deductions out over time. For businesses planning capital investments, this is a significant planning opportunity.

What About the Pass-Through Deduction?

The Section 199A deduction — the 20% deduction on qualified business income for pass-through entities like S-corps, LLCs, and sole proprietorships — has also been made permanent. If you're a business owner operating through a pass-through structure, this continues to be one of the most valuable deductions available to you.

What's Going Away

It's not all additions. Several clean energy tax credits have been eliminated or accelerated toward phase-out. Electric vehicle tax credits were phased out as of September 2025. Home electrification and energy efficiency credits for homeowners ended December 2025. EV charging credits will phase out by June 2026. If you were counting on any of these for an upcoming purchase or renovation, check the current rules before making any decisions.

Changes Are Underway

The OBBB brings a lot of certainty to a tax landscape that's been uncertain for years. For most Americans, the permanent extension of lower rates is the most important development. But for high-earners, business owners, retirees, and anyone doing estate planning, there are specific provisions worth reviewing with your advisor to make sure you're taking full advantage.

Tax law changes — even good ones — create planning opportunities that are easy to miss. If you'd like to talk through how the OBBB affects your specific situation, we're here to help.