How the One Big Beautiful Bill Act Could Reshape Your Financial and Estate Planning in 2025 and Beyond

Understanding the One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, marking one of the most comprehensive overhauls to the U.S. tax system since the 2017 Tax Cuts and Jobs Act (TCJA). The new legislation reinforces many of the TCJA’s most advantageous provisions for individuals and businesses — but it also introduces a new wave of tax incentives, deductions, and credits aimed at encouraging savings, domestic investment, and long-term financial growth.

At its core, the OBBBA seeks to simplify the tax code while expanding opportunities for wealth preservation and retirement planning. For individuals, it locks in lower marginal rates, enhances standard deductions, and creates targeted benefits for families, retirees, and service professionals. For business owners, it extends certain favorable pass-through provisions and provides more flexibility in how investment-related deductions are handled.

From a financial planning perspective, these changes are far-reaching. They reshape how Americans save, invest, and transfer wealth — and they redefine the timeline for many tax-efficient strategies that were previously set to expire. In other words, the OBBBA doesn’t just extend past tax relief measures; it reframes the next decade of personal and estate planning decisions.

For retirees, the Act’s additional senior deduction and expanded income thresholds could reduce taxable income and preserve more after-tax cash flow. For families, the enhanced child tax credit and expanded 529 plan provisions support both short-term cash management and long-term education planning. For high-net-worth investors, the adjustments to estate and gift exemptions reinforce the importance of proactive transfer strategies before future legislative sunsets.

Ultimately, the One Big Beautiful Bill Act underscores the importance of staying proactive — not reactive — when it comes to taxes and wealth strategy. While many of its provisions are designed to provide relief and stability, others are temporary or subject to future phaseouts.

Below, we explore the most impactful updates within the OBBBA — and how they could influence your financial and estate planning for years to come.

Key Financial Planning Highlights Under the One Big Beautiful Bill Act

Category Previous Law (2017) Updated Under OBBBA
Tax Rates TCJA lowered tax brackets and increased standard deductions Lower brackets and higher deductions made permanent. Seniors receive an additional $6,000 deduction per person (age 65+), effective through 2028, subject to income thresholds. Child tax credit increases to $2,200 starting in 2026.
SALT Deduction Limited to $10,000 Raised to $40,000 with phaseouts for higher earners; scheduled to revert to $10,000 in 2030.
Gift & Estate Tax Exemption $13.9 million Increases to $15 million ($30 million joint) in 2026.
Charitable Giving Deductible up to AGI limits New above-the-line $1,000 deduction ($2,000 for joint filers) for charitable contributions; itemized deductions apply to gifts exceeding 0.5% of AGI.
529 Plans Qualified up to $10,000 annually Expanded to cover up to $20,000 annually and include elementary/secondary tuition and supplies.
Car Loan Interest Not deductible Allows up to $10,000 deduction for U.S.-made cars (2025 models or newer), phasing out for incomes above $100k single/$200k joint; expires after 2029.

Making Permanent the 2017 Tax Cuts and Jobs Act (TCJA)

The One Big Beautiful Bill Act (OBBBA) cements many of the most impactful provisions of the 2017 Tax Cuts and Jobs Act (TCJA) — reforms that were originally scheduled to expire at the end of 2025. By making these changes permanent, the OBBBA provides greater clarity and stability for long-term financial planning, helping families and investors make confident decisions around savings, investment, and tax strategy.

Under the OBBBA, the current reduced income tax rates and expanded standard deductions remain in place. These measures continue to support taxpayers across income levels while creating new opportunities to manage taxable income more efficiently.

For 2026, the standard deduction will be:

  • Single: $16,300
  • Married Filing Jointly: $32,600
  • Head of Household: $24,500

A major addition under the new law is a “super deduction” for seniors age 65 and older — a key planning opportunity for retirees. This provision allows an additional $6,000 deduction per person if Adjusted Gross Income (AGI) is below $75,000 (or $150,000 for married couples). The benefit applies through the 2028 tax year and is designed to help retirees preserve more of their income and maintain tax efficiency in the early years of retirement.

From a planning standpoint, this change opens the door for retirees to:

  • Reevaluate withdrawal strategies from IRAs and 401(k)s,
  • Manage taxable income to stay under the AGI threshold, and
  • Optimize distributions to take full advantage of the available deduction.

This level of predictability in tax brackets and deductions allows advisors and clients alike to build multi-year income strategies rather than reacting to short-term legislative shifts.

For affluent families and business owners, the One Big Beautiful Bill Act also brings welcome news on the estate and gift tax front. The lifetime exemption — which shields a portion of wealth from federal estate and gift taxes — remains at TCJA levels but rises with inflation. Beginning in 2026, the exemption increases to $15 million per individual (or $30 million for married couples).

This expanded window creates a strategic opportunity to:

  • Transfer wealth to future generations while minimizing estate tax exposure,
  • Utilize advanced gifting strategies, such as Grantor Retained Annuity Trusts (GRATs) or Spousal Lifetime Access Trusts (SLATs), and
  • Fund family foundations or donor-advised funds to align tax efficiency with philanthropic goals.

By acting before potential future rollbacks or legislative adjustments, high-net-worth individuals can preserve more of their estates and strengthen intergenerational wealth plans.

The OBBBA also enhances support for families with children by raising the Child Tax Credit to $2,200 per qualifying child beginning in 2025 and extending through 2028. This change not only helps offset rising costs of living but also creates room for families to reinvest in education, savings, or debt reduction.

Together, these provisions signal a legislative shift toward stability and predictability — two vital elements in long-term financial planning. With clear parameters now established for income taxes, standard deductions, and estate thresholds, investors and families can take a more deliberate approach to building, protecting, and transferring wealth.

“Trump Accounts” — A New Era for Newborn Savings

Families with children born between January 1, 2024, and December 31, 2028, can now open federally backed “Trump Accounts.” Each newborn account receives a $1,000 one-time federal contribution.

  • Parents may contribute up to $5,000 per year, with tax-deferred growth.
  • Contributions stop once the child turns 18.
  • Withdrawals are tax-free for qualified expenses (up to 50% available at age 18; full access at 25).
  • By age 30, funds can be used for any purpose, though non-qualified withdrawals before then face income tax and a 10% penalty.

This account structure offers parents another tool for education savings and long-term wealth accumulation.

Additional Deductions and Adjustments

The One Big Beautiful Bill Act (OBBBA) introduces a range of targeted deduction adjustments designed to give taxpayers more flexibility — particularly middle-income earners, service workers, and families looking to optimize their cash flow. While some benefits are temporary, others create lasting opportunities for strategic financial and tax planning.

One of the most talked-about changes is the State and Local Tax (SALT) deduction update. The OBBBA raises the long-standing $10,000 cap to $40,000 ($40,400 beginning in 2026).

This expansion provides significant relief for taxpayers in high-tax states who have been limited since the 2017 TCJA. However, there’s a catch: for those with Modified Adjusted Gross Income (MAGI) above $500,000, the deduction begins to phase out gradually, though a minimum $10,000 deduction remains available to all taxpayers.

For individuals and families subject to higher state and property taxes, this creates a strategic window to revisit itemization strategies and coordinate state-level deductions for optimal savings between now and the 2030 sunset date.

From a financial planning perspective, this may also affect where taxpayers choose to allocate income and charitable contributions to remain under key thresholds.

A new and unexpected feature of the OBBBA is the introduction of a deduction for automobile loan interest — a first in modern tax policy.

Taxpayers earning less than $100,000 (single) or $200,000 (joint) can now deduct up to $10,000 in interest paid on qualifying U.S.-assembled vehicles (model year 2025 or newer).

This deduction phases out between $100,000 and $150,000 of MAGI (or $200,000–$250,000 for joint filers) and is unavailable to higher-income earners. The policy is designed to encourage domestic vehicle purchases and provide additional relief to working professionals and young families financing new vehicles.

For clients, this may open new planning opportunities to:

  • Evaluate the timing of vehicle purchases,
  • Leverage the deduction before its scheduled 2029 expiration, and
  • Assess whether a vehicle qualifies under the “U.S.-assembled” requirement.

While not a major deduction for high-net-worth households, it does create a potential cash-flow advantage for clients within the eligible income range.

The Act also introduces two new above-the-line deductions designed to support the service sector — a group often excluded from major tax relief provisions.

Between 2025 and 2028, eligible service workers can deduct:

  • Up to $25,000 in reported tips (with phaseouts beginning above $150,000 for single filers and $300,000 for joint filers), and
  • Up to $12,500 in overtime pay ($25,000 for joint filers).

These deductions are expected to increase after-tax income for employees in hospitality, personal services, and related industries. For small business owners and managers, this may also shift compensation planning, as employees in qualifying categories may benefit from a lower effective tax rate on variable income.

The OBBBA also revises or eliminates several deductions that have been points of contention in prior tax law debates:

  • Casualty Loss: Taxpayers can now claim deductions for losses tied to state- or federally declared disasters — an important update for individuals in areas affected by hurricanes, wildfires, or floods.
  • Miscellaneous Deductions: These have been fully eliminated, including unreimbursed educator expenses, union dues, and other itemized “2% AGI” miscellaneous categories.
  • Mortgage Interest: The cap on deductible mortgage debt remains permanently set at $750,000, providing clarity for homeowners and real estate investors planning future purchases.
  • Charitable Contributions: Only contributions exceeding 0.5% of AGI now qualify for a deduction, though carryforwards are permitted. This provision encourages larger, more intentional giving strategies rather than small recurring donations.

From a strategic standpoint, these changes reinforce the need for integrated financial and estate planning — ensuring that deductions, giving strategies, and capital investments are coordinated under the new framework.

In aggregate, the OBBBA’s deduction updates shift the focus toward middle-income relief and simplified reporting, while subtly reducing smaller itemized benefits. For individuals and families with complex financial lives, it underscores the importance of reviewing:

  • Whether to itemize or claim the standard deduction,
  • How to time charitable contributions and state tax payments, and
  • Whether new deductions (like auto loan interest) can create incremental tax efficiency.

At Echelon Financial, we help clients navigate these nuanced tax changes by integrating them into their broader financial and estate strategies — ensuring every dollar saved today contributes to long-term wealth preservation tomorrow.

Energy-Related Tax Credit Rollbacks

The OBBBA scales back or eliminates several energy-focused incentives:

  • Energy-Efficient Home Improvement Credit: Removed.
  • Residential Clean Energy Credit: No longer applies to home renewable installations.
  • Home Builder Energy Credit: Discontinued for contractors.

Homeowners and real estate investors should revisit energy-related projects and adjust accordingly.

What It Means for Your Finances

According to the Council of Economic Advisors, the One Big Beautiful Bill Act could raise average household take-home pay by $7,800–$13,300. But the true benefit depends on your income level, deductions, and how well you align your financial and estate planning with the new framework.

Lower permanent tax rates, enhanced deductions for retirees, and a temporarily expanded estate exemption create significant opportunities — but they also underscore the need for a coordinated tax and investment strategy.

Next Steps: Aligning Your Financial Plan with the One Big Beautiful Bill Act

The OBBBA’s provisions take effect immediately, which means your 2025 financial planning decisions should already account for them.

At Echelon Financial, we help clients translate new legislation into actionable strategies — from adjusting portfolio allocations to maximizing tax efficiency and protecting multigenerational wealth.

Our team is actively evaluating how these changes affect retirement income, charitable giving, estate planning, and long-term tax exposure.

Now is the time to review your strategy.
Schedule a consultation with Echelon Financial today to understand how the One Big Beautiful Bill Act could impact your financial future — and ensure your wealth plan remains ahead of the curve.