The One Big (and really long) Beautiful Bill Act was enacted on fittingly July 4th, 2025, by the 119th Congress of the United States. Who has the time to read this novel and figure out some of the key points? We have made it easy for you and picked out some of the most asked about and discussed topics. Below we will go through some to point out key details that might help to answer your questions and how it affects you.
Taxes:
Everyone’s most favorite subject (insert eye roll emoji).
- Tax rate cuts that were introduced in 2017 by the 2017 Tax Act are being extended. The highest income tax rate remains at 37% and these rates have been extended indefinitely.
- Standard deductions changed for single filers to $15,750 and for joint filers to $31,500. Make note though this adjusts annually for inflation starting in 2026.
- Itemized deductions are capped at 35%.
- Child tax credit is going to $2,200 from $2,000 starting in 2026.
Financial Planning:
We are seeing some exciting things going on in this section.
- You can contribute $7,500 of pretax dollars to a dependent care assistance program (long term care).
- 529 plans have expanded the age for k12. The contribution limit has also been increased from $10,000 to $20,000. They have also broadened the definition for post-secondary education.
- IRAs for minors or “Trump Accounts” have been the talk of the town lately. Children born between January 1st, 2025, and January 1st, 2029, are automatically enrolled. Maximum annual contribution of $5,000 and no income requirements. Includes a $1,000 government “seed” contribution (which will not come out until around July 2026).
Estate Planning:
- The estate/gift tax exemption is set at $15 million and $30 million for a married couples starting in 2026. It will be indexed for inflation starting in 2027.
- Stepup-in-basis rules have no changes and are not set to expire or revert.
Business Planning:
- Passthrough business entities are still able to deduct a portion of their “qualified business income” by retaining the 20% deduction and makes it permanent.
- A business may depreciate 100% of the purchase price of an asset in the year of purchase and is a permanent change to the law in the OBBB. It also expands the depreciation rules to allow a 100% depreciation on qualified production property (certain nonresidential real estate in the U.S.) through 2029.
- The cap on section 179 business deductions has increased from $1MM to $2.5 MM with a phaseout threshold going up to $4MM.
Charitable Planning:
- For tax years starting in 2026, individuals who do not itemize may claim a $1,000 (single filers) or $2,000 (joint filers) deduction for their charitable gifts. Contributions to donor advised funds and private foundations are not eligible and this is an abovethe-line charitable deduction.
- An amount equal to .5% of a taxpayer’s AGI will not be deductible when calculating a charitable income tax deduction. Only amounts above that floor will be eligible for a charitable deduction. Any charitable deductions disallowed due to this floor may be carried forward for 5 years.
- Itemized deductions are capped at 35%.
- The 2017 Tax Act increased the percentage of a charitable gift of cash that could be deducted in any tax year from 50% to 60%. This was set to expire in 2026 but has now been permanently extended.
