Financial Planning Opportunities From The "One Big Beautiful Bill"

On July 4, the President signed into law the "One Big Beautiful Bill" (OBBB), a sweeping piece of legislation that marks the most comprehensive tax reform since the Tax Cuts and Jobs Act (TCJA). After months of negotiation, the bill passed with several landmark provisions — many of which are permanent.    For taxpayers and advisors, the OBBB creates a level of predictability in a landscape that has long been clouded by uncertainty. However, while the bill stabilizes several aspects of the current tax system, it does not resolve the country’s underlying fiscal pressures. National debt, rising interest costs, and impending Social Security insolvency all suggest that today’s favorable tax environment may not last forever.    Below is a breakdown of what OBBB means for income, estate, and state-and-local tax (SALT) planning, along with timely strategies to take advantage of this legislative window. 

Key Highlights at a Glance 

Estate and Gift Tax Planning: Less Urgency, More Strategy 

Starting in 2026, the estate and gift tax exemption will permanently rise to $15 million per individual, indexed for inflation. By establishing the permanent exemption and avoiding the ‘sunset’ period from the Tax Cuts and Job Acts (TCJA), clients have an opportunity to be more strategic about their estate planning.  

Many high-net-worth clients that would have been affected by the reversion of the estate tax exemption to pre-2018 levels no longer need to look to aggressively move assets out of their estate. This may create more flexibility in legacy planning. 

Income Tax: Stability & Strategic Opportunity 

The OBBB makes the TCJA’s individual tax brackets permanent. The standard deduction increases slightly and remains indexed to inflation. There is also an extra $6,000 deduction available to taxpayers 65 and older.

The continued wider tax brackets (married couples with income of $250K+ are in 24% tax bracket until they reach nearly $400K) provides some favorable planning opportunities. Roth IRA conversions and strategic capital gains realization might be beneficial.  

QBI Deduction: Continued Opportunity for Business Owners 

The permanent continuation of the Qualified Business Income deduction allows sole proprietorships, partnerships, and S-corporations to deduct up to 20% of qualified business income. The full 20% QBI deduction is available to single taxpayers earning up to $197,300 and joint filers earning up to $394,600. Phase-out of the QBI deduction begins above these income levels.  

As an example, for a sole proprietor with total net business income of $150,000, the savings from QBI deduction might look something like this: 

(Assumes 2025 brackets similar to 2024, with marginal rates of 12%, 22%, and 24%) 

This example is a simplified version of a complex and nuanced tax provision. We would highly recommend consulting with your CPA or tax preparer regarding Qualified Business Income deductions. 

The Fiscal Reality: Plan While the Sun Shines 

While the “One Big Beautiful Bill” delivers clarity, stability, and strategic opportunities for advisors and clients alike, the permanence of these ‘permanent’ changes may only be as long as the next election cycle.  

Overall, long-term federal finances remain troubling. Interest payments on national debt are higher than the federal defense budget. The Social Security trust fund is approaching exhaustion. And, there seems to be little appetite in Washington, D.C. to rein in spending or balance the budget.  

Given all of this, the current favorable conditions created by the OBBB are an excellent opportunity for clients to plan now in order to best position assets and estates for the future.  

If you have questions or would like to learn more about how the tax changes may affect you, please feel free to contact us.