July 4th the “One Big Beautiful Bill Act” (OBBBA) was signed into law. Several components that could impact your taxes and overall financial plan are contained within its 1,000+ pages—so much for tax simplification.
We’ve highlighted a few of the most notable changes that we believe will impact our clients.
So, how will the One Big Beautfiul Bill Act affect your taxes in 2026 and beyond?
The core of the bill made permanent a lot of the provisions in the original Tax Cuts and Jobs Act (TCJA) that was signed into law in 2017. Many of which were scheduled to expire at the end of 2025.
Tax Brackets Made Permanent—No Increases for Most Taxpayers
The law permanently extends the current tax brackets of 10%, 12%, 22%, 24%, 32%, 35%, and 37%, which have been in place since 2018. Without this change, rates were set to revert to pre-TCJA levels in 2026, which would have impacted nearly all taxpayers except those in the 10% and 35% brackets. Those in the middle brackets of 12%, 22% and 24% would have faced increases of 3 to 4 percentage points in their marginal tax rates.
Higher Standard Deduction Locked In and Increased
The OBBBA also made permanent, as well as increased, the standard deduction. If the TCJA had been allowed to sunset, the standard deduction would have been cut roughly in half. Instead, the new law locks in the higher standard deduction, and it also increases it further: by $750 for single filers and $1,500 for joint filers.
The table below compares the previous 2025 standard deduction, the updated amount under OBBBA, and the estimated standard deduction had it been allowed to revert to pre-TCJA levels:
| Filing Status | 2025 Standard Deduction (pre-OBBBA / TCJA in effect) | 2025 Standard Deduction (after OBBBA) | What It Would Have Reverted to if TCJA Had Sunset (2026 rules) |
| Single | $15000 | $15,750 | $8,350 |
| Married Filing Jointly | $30,000 | $31,500 | $16,700 |
Source: One Big Beautiful Bill Act Tax Changes FAQ / Tax Information
Additional (Temporary) Deductions for Age 65+
While President Trump campaigned to eliminate taxes on Social Security benefits, the new law did not fully accomplish that. Instead, OBBBA creates a temporary additional $6,000 deduction for seniors 65 or older.
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- Eligibility: Available to taxpayers 65 or older
- Deduction amount: $6,000 per eligible taxpayer
- Income phaseout begins at:
- $75,000 (single)
- $150,000 (married filing jointly)
- Deduction fully phases out at:
- $175,000 (single)
- $250,000 (married filing jointly)
- Expires after 2028 unless extended by Congress
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The tax law’s cumulative impact on the standard deduction is potentially significant for taxpayers who fall within the age and income requirements.
For example, a married couple who are both age 65+ with 2025 MAGI under $150,000 will see their standard deduction increase from $33,200 to $46,700, a jump of more than 40%.
However, this deduction is currently only temporary. The OBBBA has this provision expiring after 2028, which also happens to be an election year. Whether it gets extended remains to be seen, but it is doubtful that either major political party will want to take responsibility for raising taxes on seniors.
Itemized Deductions
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- State and Local Taxes (SALT) – While the new law will make itemizing deductions less attractive for many, taxpayers who do choose to itemize can benefit from an increased State and Local Tax (SALT) deduction, which rises from $10,000 to $40,000. This deduction applies to the total amount paid for state and local income, sales, and property taxes.
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Again, this $40,000 SALT deduction cap is temporary, and it will revert to $10,000 in 2030 unless Congress extends it. The enhanced deduction also phases out for households with MAGI exceeding $500,000 and is fully reduced to $10,000 once MAGI reaches $600,000. Both the cap and income thresholds are indexed for inflation through 2029.
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- Charitable Deductions – Beginning in 2026, the deductibility of gifts to qualified charitable organizations will be subject to a new floor that is equal to 0.5% of Adjusted Gross Income (AGI). What this means for taxpayers who itemize is that charitable deductions will only be allowed to the extent that they exceed 0.5% of a taxpayer’s AGI.
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Example: How the new charitable deduction floor works
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- A household has an Adjusted Gross Income (AGI) of $150,000 in 2026
- They donate $15,000 to qualified charitiable organizations
- Under previous law, the full $15,000 would have been deductible
- Under OBBBA, a 0.5% AGI floor applies to charitable deductions:
- 0.5% of $150,000 = $750
- Only the amount above the floor counts toward itemized deductions:
- $15,000 – $750 = $14,250 deductible
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Increased Estate Tax Exemption Made Permanent
Another key provision of the One Big Beautiful Bill Act is the permanent extension and enhancement of the elevated estate and gift tax exemption, sidestepping the scheduled expiration at the end of 2025.
The Tax Cuts and Jobs Act (TCJA) doubled the exemption beginning in 2018, increasing from $5.6 million to $11.2 million per person, with annual inflation adjustments since then. For 2025, the exemption is set at $13.99 million per person, allowing a married couple to transfer up to $27.98 million to beneficiaries free of federal estate tax.
Without legislative action, the exemption would have reverted to pre-TCJA levels in 2026, effectively cutting it in half and significantly reducing the amount individuals could transfer tax-free. The OBBBA makes the higher exemption permanent and increases it to $15 million per person (or $30 million per couple) starting in 2026, with future inflation adjustments.
While fewer than 0.1% of estates are currently subject to the federal estate tax, permanently enacting the higher exemption removes a significant source of uncertainty for families with substantial assets. By eliminating the risk of a sharp reduction in the exemption after 2025 the new law provides greater flexibility in developing long-term estate planning and gifting strategies.
What’s Next?
Stay tuned in the coming weeks as we plan to spotlight a range of financial planning considerations in response to the One Big Beautiful Bill Act.
Our commitment to clients goes well beyond managing investments. Our goal is to help you understand how new laws could directly impact your broader financial picture and estate goals. By leveraging advanced planning software like Holistiplan, MoneyGuide, and RightCapital, we can evaluate your unique situation and develop personalized recommendations.
While we always advise consulting with your own tax professional on these matters, we’re happy to coordinate with your accountant and/or estate planning attorney to ensure that any planning moves are seamlessly implemented and aligned with your long-term goals.
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