The “One Big Beautiful Bill Act” (OBBBA): What the 2025 Tax Law Means for Your Financial Plan

After years of uncertainty around the expiration of the Tax Cuts and Jobs Act (TCJA), the next chapter of U.S. tax policy has officially begun. On July 4, 2025, President Trump signed the long-anticipated tax reform package – known as the "One Big Beautiful Bill Act" (OBBBA) – into law, largely extending the tax landscape for individuals, families, and business owners for years to come.

As a financial planner serving affluent retirees, high earners, and business owners, I’ve been closely monitoring these changes to help clients stay one step ahead of shifting rules. While OBBBA preserves much of what TCJA had introduced, it also brings several new opportunities – and complications – that require proactive planning.

Now, I recognize that this legislation touches on a wide range of issues beyond taxes, many of which have sparked strong political opinions. But for the purpose of this article, I encourage you to set those views aside and focus purely on the tax implications.

With that in mind, let’s dive into what OBBBA means for your financial future—and how smart planning can help you make the most of the changes ahead.

TCJA Lives On – Mostly

The OBBBA makes permanent several popular provisions of the original TCJA, including:

• Tax Brackets: The current seven-bracket structure remains in place, preserving lower rates on most types of income.

• Standard Deduction: Still significantly higher than pre-TCJA levels, helping more taxpayers avoid itemizing.

• Section 199A Deduction: The Qualified Business Income (QBI) deduction remains, allowing eligible pass-through business owners to deduct up to 20% of qualified income.

• Child Tax Credit: Still expanded and refundable, though modestly adjusted for inflation.

For many households, this is good news – it preserves a favorable tax environment that’s become familiar over the past several years.

SALT Deduction Temporarily Expanded

One of the most talked-about changes: the State and Local Tax (SALT) deduction cap is temporarily raised from $10,000 to $40,000 through 2029. However, this benefit comes with some caveats:

• High earners may see this expanded deduction phased back down to the $10,000 limit.

• Starting in 2030, the SALT deduction returns to the original $10,000 cap for everyone.

  
  

For clients in high-tax states like Connecticut or New York, this provides a narrow window to potentially benefit from greater deductions. Tax planning strategies – such as timing state tax payments – can help maximize this short-term opportunity.

New Deductions for Seniors, Workers, and Borrowers

OBBBA introduces several new below-the-line deductions aimed at specific groups:

• $6,000 Senior Deduction: Available to taxpayers age 65+ from 2025 to 2028, this deduction rewards retirees for aging gracefully.

• Up to $25,000 Deduction for Tips and Overtime: Designed to support hourly and shift-based workers, this could benefit small business owners who report such income.

• Up to $10,000 of Auto Loan Interest Deduction: A potentially useful break for younger clients or those with high-interest vehicle financing.

  
  

All of these new deductions are temporary (2025–2028) and subject to income thresholds. While individually small, they add complexity and may influence how we evaluate income, expenses, and deduction timing in your financial plan.

Changes to Charitable Giving and Itemized Deductions

Charitable giving strategies need to be revisited under the new law:

• 0.5%-of-AGI Floor for Charitable Deductions: Contributions are now only deductible above this threshold, reducing the net tax benefit for some donors.

• Itemized Deduction Cap for High-Income Taxpayers: Those in the 37% bracket may see the value of their itemized deductions capped at 35% of taxable income.

  
  

For charitably inclined clients, especially those using Donor Advised Funds or gifting appreciated stock, it will be more important than ever to strategically plan the timing and type of gifts.

Estate Planning: More Room to Plan (for Now)

The federal estate and gift tax exemption is increased to $15 million per person, or $30 million for a married couple. This change provides a significant opportunity to transfer wealth to heirs or trusts without triggering estate tax – but it may not last forever.

Clients with significant estates should consider using this window to:

• Maximize lifetime gifting strategies.

• Establish or fund irrevocable trusts.

• Transfer family business interests in a tax-efficient way.

  
  

More Tax Tweaks You Should Know

OBBBA includes a handful of other updates that may affect your planning:

• Alternative Minimum Tax (AMT): The exemption now phases out faster and starts phasing out at lower income levels.

• 529 Plans: Expanded to cover K–12 education materials and vocational credentials, offering greater flexibility for education-focused families.

• Qualified Opportunity Zones: Extended to encourage long-term investment in designated communities.

• “Trump Accounts” Introduced: These new tax-deferred savings vehicles, similar to IRAs, can be opened at a young age without earned income – a possible planning tool for intergenerational wealth transfer.

  
  

What This Means for You

While many of these provisions may appear modest in isolation, collectively they represent a significant shift in the way we think about taxes, income, and deductions.

For high-income professionals, retirees with large estates, and business owners navigating QBI or charitable strategies, this new law:

• Adds complexity to year-over-year tax planning.

• Presents both temporary and long-term windows of opportunity.

• Demands greater coordination between your financial planner and CPA.

  
  

Final Thoughts

At In The Money Retirement, we believe clarity leads to confidence. OBBBA adds layers to the tax code, but with proactive planning and personalized strategy, these changes can work in your favor.

If you haven’t revisited your financial plan in light of these updates, now’s the time.

✅ Want help reviewing your 2025 tax strategy?

✅ Curious whether the $15 million estate exemption should change your gifting plans?

✅ Wondering how to maximize deductions under the new rules?

About The Author

Marc Lowe is the Founder & President of In The Money Retirement Planning. He is a Certified Financial Planner and member of NAPFA National Association of Personal Financial Advisors, XY Planning Network & Fee-Only Network. He works with retirees and those approaching retirement. He has over a decade of experience helping these folks grow their net worth, organize their finances and build better lives for themselves and their families.

CEO & Founder of In The Money Retirement Planning

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