How the “Big, Beautiful Bill” Impacts Your Taxes and Your Wealth
How the “Big, Beautiful Bill” Impacts Your Taxes and Your Wealth
What every investor should know about the most important tax legislation in years
On July 4, 2025, President Trump signed the One Big, Beautiful, Bill (OBBB) into law—bringing sweeping changes to the U.S. tax code and locking in many of the individual tax provisions originally introduced by the 2017 Tax Cuts and Jobs Act (TCJA).
While you may not see a dramatic tax cut compared to recent years, the good news is that you’ve likely avoided a significant tax hike that was set to occur if the TCJA provisions were allowed to expire at the end of 2025.
For investors, this new law creates a window of opportunity for long-term planning, tax savings, and smarter wealth transfer strategies.
What Changed: Side-by-Side Comparison
Provision | TCJA (2017) | One Big, Beautiful Bill (2025) |
|---|---|---|
Federal income tax rates | Expanded 7 brackets and lowered the top rate | Permanently extended TCJA rates |
Itemized deductions | Many capped or disallowed (e.g. SALT capped at $10K, 2% misc. deductions eliminated) | SALT cap increased to $40K (phased out at $500K income), 2% misc. deductions permanently disallowed, itemized deductions capped at $0.35 per $1 for top earners |
Standard deduction | Nearly doubled | Elevated amount made permanent |
Alternative Minimum Tax (AMT) | Fewer taxpayers affected due to higher exemption thresholds | Higher AMT exemption/phase-outs made permanent |
Gift & Estate tax exemption | Doubled exemption | Increased to $15M per person, indexed to inflation |
Key Takeaways for Investors
1. Tax Brackets Stay Lower
The expanded tax brackets and lower top rate from the TCJA are now permanent, reducing the long-term burden of federal income taxes for many.
2. Standard Deduction Is Here to Stay
The elevated standard deduction has been made permanent, simplifying tax filing for many and reducing taxable income for non-itemizers.
3. SALT Deduction Relief – With Limits
The SALT deduction cap rises from $10K to $40K, but only for those earning under $500K. This opens planning opportunities for high-income households in high-tax states—if they can keep income below the threshold.
4. Charitable Giving Rules Evolve
Taxpayers who don’t itemize can now deduct up to $1,000 ($2,000 for joint filers) in charitable donations. However, for those in the top tax bracket, charitable deductions are capped at $0.35 per $1 donated.
5. Larger Estate Tax Exemption
High-net-worth investors can now shield up to $15 million from federal estate and gift taxes—allowing more wealth to be transferred efficiently and tax-free.
Why This Matters
The OBBB adds clarity—but not simplicity. While some taxpayers benefit from lower rates and more deductions, others—especially high earners—face new limitations. The result is a more complex but highly strategizable tax environment, where thoughtful planning can make a meaningful financial difference.
Planning Opportunities to Explore
- SALT Deduction Optimization: If your income is near $500K, timing income and deductions could help preserve your full SALT benefit.
- Charitable Bunching: Consider accelerating donations to maximize deductibility under new limits.
- Estate Planning Refresh: With the $15M exemption now in play, it’s time to revisit gifting strategies and wealth transfer plans.
- Trust Utilization: Non-grantor trusts may help take advantage of separate SALT caps and manage income more effectively.
- QOZ Strategies: Tax deferrals from Qualified Opportunity Zones expire after 2026—loss harvesting and other tactics may soften the blow.
The Bottom Line
The “Big, Beautiful Bill” may not feel like a windfall, but it likely saved you from a looming tax hike. More importantly, it offers a framework for smarter tax planning—one that favors investors who take action early.
At taxsavingstrategies.com, we specialize in helping you keep more of your wealth through proactive tax planning and intelligent investing.
Let’s build a smarter tax plan around this new law—while the opportunity is still beautiful.