The recently passed One Big Beautiful Bill Act (OBBBA) brings major updates to taxes, deductions, and savings plans. Whether you’re planning your estate, saving for your children, or preparing for retirement, these changes may impact your financial strategy. Here’s a breakdown of the most important changes:
- Estate Tax Exemption Increase (2026)
Starting in 2026, the estate tax exemption increases to:
- $15 million per person
- $30 million per married couple
This amount will adjust yearly for inflation. This means more of your estate can be passed on tax-free.
- Higher SALT Deduction Cap (Through 2029)
The deduction for State and Local Taxes (SALT) increases to $40,000, but phases out if your income is between:
- $500,000 and $600,000
(Note: These thresholds do not double for joint filers.)
- Income Tax Brackets Stay the Same (Now Permanent)
The seven current income tax brackets are now permanent (unless Congress changes them):
- 10%, 12%, 22%, 24%, 32%, 35%, 37%
- Bigger Standard Deduction + Senior Bonus (2025)
Starting in 2025, the standard deduction increases to:
- $31,500 for married couples
- $15,750 for single filers
- $23,625 for heads of household
Taxpayers 65 and older also get a new $6,000 bonus deduction, phasing out at:
- $150,000 for couples
- $75,000 for individuals
This bonus expires after 2028.
- Expanded 529 Plan Use
You can now use 529 plan funds for more types of education, including:
- Homeschool and K–12 materials
- Tutoring and classes
- Dual enrollment tuition
- Certification prep (CPA, CFP, Bar Exam, etc.)
- New “Trump Accounts” for Kids
Families can now open special savings accounts for kids under 18:
- Contribute up to $5,000/year per child
- Employers may add $2,500 tax-free
- $1,000 bonus from the IRS for babies born 2025–2028
These accounts grow tax-free, but there’s no upfront deduction.
- Business Owner Benefits
Business owners can now:
- Deduct 100% of asset costs (bonus depreciation) for assets placed in service after Jan 20, 2025.
- Use increased Section 179 limits ($2.5 million cap, $4 million phaseout)
- More Deductions for Workers and Donors
Between 2025–2028, you may get:
- Tax-free tips and partial exclusion of overtime pay
- A $1,000 deduction for charitable gifts (even if you don’t itemize)
- Up to $10,000 per year deduction on vehicle loan interest (income limits apply)
- QBI Deduction Extended
The Qualified Business Income (QBI) deduction is extended with slightly higher income limits. However, white-collar professionals may still be restricted.
Coming Soon: Video Explainers
We’ll go deeper into:
- Social Security updates
- Tax-free tip rules
- Charitable giving deductions
