The One Big Beautiful Bill Act (OBBBA) reshapes financial planning, introducing potential opportunities and challenges with taxes, estate planning and how you repay student loans. It’s important to know what these changes are and how they might impact future planning. Below are some key highlights to discuss with your financial professional and tax advisor to help you evaluate if your goals remain on track.
Considerations for People Ages 65 and Older
Additional Deduction for Seniors
Starting in 2025, and available until 2028, individuals ages 65 and older will benefit from an additional senior deduction of $6,000 per person. You do not need to be receiving Social Security benefits to qualify for this deduction. This deduction is in addition to the standard deduction and the extra standard deduction, bringing the total standard deduction for single filers age 65+ to $23,750 in 2025 ($46,700 for married couples if both spouses are 65+).
This deduction begins to phase out for taxpayers with modified adjusted gross income above $75,000 ($150,000 for joint filers). Discuss with your financial professional how this deduction could help minimize your taxes.
Estate and Gift Taxes
Gift and estate tax exemptions have increased to $15 million for individuals and $30 million for married couples filing jointly, indexed to inflation. Before the OBBBA, the federal estate tax exemption was scheduled to be cut in half in 2026, which would have increased the number of estates required to pay the tax.
The generation-skipping tax (GST) exemption now matches the estate exemption, preserving the stepped-up basis at death and preserving more of your wealth for your grandchildren.
This may be an ideal time to review your beneficiaries and legacy plans with your financial advisor.
Comparison of estate tax exemptions
FEATURE
Exemption per person
Exemption for married couples
GST exemption
2025
$13.99 million
~$27.98 million
Matches estate level
2026+
$15 million, indexed
~$30 million
Matches $15 million per person
FEATURE
2025
2026+
Source: The National Law Review, “One Big Beautiful Bill: Estate and Gift Tax Exclusion and the Generation-Skipping Transfer Tax Exemption Increases to $15 Million,” July 3, 2025.
Planning After the One Big Beautiful Bill Act
Considerations for Parents
Trump Accounts
It’s never too soon to start setting money aside to secure a financial future, and Trump Accounts are designed to help with that. Starting January 1, 2026, any US citizen who is not yet age 18 by the end of the calendar year 2025 can have a Trump Account opened for them. In addition, children born between January 1, 2025 and December 31, 2028 will receive a one-time, tax-free $1,000 government contribution.
Starting July 4, 2026, parents, family members and friends can contribute up to $5,000 annually (indexed to inflation), which will grow tax- deferred. Of this $5,000 limit, up to $2,500 per year can come from each parent’s employer and will not count toward parents’ taxable income. After a child turns 18, qualifying withdrawals may be used for education costs, home purchases, or business start-up expenses and will be taxed as ordinary income. Non-qualified distributions will be taxed as ordinary income plus a 10% penalty. Be sure to discuss with your financial professional if a Trump Account makes sense for your family and, if so, how you could properly invest in this type of account.
Expanded Uses for 529 Plans
529 plans have been a great way for families to save for their children’s future higher education expenses. Under the OBBBA, the definition of what constitutes a qualified distribution has been broadened. Distributions from 529 plans now include curriculum materials, tutoring, standardized testing fees, trade school fees and certain homeschooling expenses. It also makes permanent the rollover provision from 529 plans to ABLE accounts, offering greater flexibility for families.
Child Tax Credit
The child tax credit has permanently increased to $2,200 per qualifying child, offering additional tax savings. Consider using this credit as an opportunity to discuss 529 funding strategies with your financial advisor.
Achieving a Better Life Experience (ABLE) Adjustment Act
A working beneficiary can contribute more than the standard annual limit if they don’t participate in an employer-sponsored retirement plan. The additional contribution is the lower of earned income or 100% of the federal poverty level for a one-person household in their state.
This expands eligibility to anyone disabled before the age of 46 (up from age 26). ABLE account contributions will be eligible for the Saver’s credit, and 529s can be rolled into an ABLE account for the beneficiary or eligible family members.
Considerations for Workers
Student Loan Payment Exemptions
Having to pay off student loans could create a hurdle in your plans. Employer-provided education assistance allows for up to $5,250 annually in employee compensation to be free from federal and employment tax, meaning the employee would not be taxed on this amount. This offers reduced tax responsibility for workers paying down student debt, freeing up resources for retirement savings.
Changes to Tax on Tips or Overtime
If you or a loved one is a tipped employee, changes to how tips are taxed may provide an opportunity to save on taxes. From 2025 to 2028, qualified tips and overtime compensation will be tax-deductible, up to $25,000 for tips and $12,500 ($25,000 for joint filers) for overtime. These deductions phase out for individuals with modified adjusted gross income above $150,000 ($300,000 joint).
Planning After the One Big Beautiful Bill Act
Other considerations
State and Local Tax (SALT) Deductions
Property taxes continue to go up wherever you live. If you are in an area with high property taxes, the update to the State and Local Tax (SALT) deduction may be helpful. The OBBBA has increased the SALT deduction cap to $40,000 but will revert to $10,000 in 2030. High-income taxpayers (earning $500,000+) will see a phase-out of the increased cap. Tax strategies that don’t rely on itemized deductions, such as qualified charitable distributions, may be worth exploring.
Permanent versus temporary provisions
Permanent
Trump Account
Estate and gift tax exemption
Child tax credit
ABLE account enhancements
Additional qualified education expenses for 529 plans
Student loan payment exemption
Temporary
Trump Account tax credit
Additional standard deduction for age 65+ for tax years 2025–2028
No tax on tips and overtime for tax years 2025–2028
Passenger vehicle loan interest deduction for tax years 2025–2028
SALT deduction cap increase
PERMANENT
TEMPORARY
The One Big Beautiful Bill Act introduces new provisions that could change your financial plan. Schedule a meeting with your financial advisor or tax professional to explore how these updates may benefit you and your family.
Revised as of November 6th, 2025.
Source: Congress.gov, “H.R.1 – One Big Beautiful Bill Act,” enacted July 4, 2025.
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