The passage of the One Big, Beautiful Bill Act (OBBBA) on July 4, 2025, provides a reprieve to net-worth families who faced the prospect of losing many taxpayer-friendly provisions of the tax code that were set to expire at the end of this year. However, maximizing the potential benefits of the new law requires strategic planning and consideration for how shifts in the balance of power in Washington, D.C., may limit their impact over time.
Individual Tax Rates and Standard Deduction
The OBBBA makes permanent the current marginal income tax rates, with a top rate of 37 percent and a higher standard deduction in 2025 of $15,750 for single filers and $31,500 for married taxpayers filing jointly. This provides families with certainty regarding future income and tax planning, including the benefit of making a Roth conversion in the near future, when rates remain low.
The law also introduces an additional standard deduction of up to $6,000 for individuals ages 65 and older ($12,000 for married filing jointly) for tax years 2025 through 2028. The amount of the deduction decreases when an individual taxpayer’s income reaches $75,000 (or $150,000 for joint filers) and phases out completely when income exceeds $175,000 (or $350,000 for married filing jointly).
Estate Tax Exemption
The new law extends the very generous estate and gift tax exemption currently in place for 2025 at $13.99 million for individuals and $27.98 million for married couples filing jointly, which were scheduled to be cut in half in 2026. Instead, the law increases the lifetime exclusion to $15 million at death or for gifts made after December 31, 2025, or $30 million for married taxpayers filing jointly. The exemption will be indexed for inflation after 2026.
While gifting assets remains an important strategy for ultra-high-net-worth families to reduce the size of their taxable estates, those with smaller estates may consider alternative income tax planning strategies that preserve wealth and protect asset appreciation.
State and Local Tax Deduction
Beginning in tax year 2025, the existing $10,000 cap on the deduction for state and local taxes (SALT) increases to $40,000 for single and married taxpayers filing jointly. The amount of the deduction increases by 1 percent each year through 2029 and sunsets back to $10,000 in 2030. However, the amount that individuals may claim as a SALT deduction in 2025 through 2029 decreases to no less than $10,000 when a taxpayer’s annual modified adjusted gross income (MAGI) exceeds $500,000. Taxpayers with MAGI close to the income phase-out range may consider accelerating deductions and utilizing various trust vehicles over the next four years. This may include gifting assets to an irrevocable non-grantor trust, which files its own tax return separate from the grantor and can claim its own SALT deduction of up to $40,000 on trust assets.
Charitable Deductions
Under the OBBBA, cash gifts to qualifying charities made by individuals who itemize their deductions are eligible for a deduction of up to 60 percent of the taxpayer’s adjusted gross income (AGI). Gifts of appreciated assets are limited to 30 percent of AGI. The law also introduced a new charitable deduction for non-itemizing taxpayers of up to $1,000 for individuals and $2,000 for married couples filing jointly.
New Savings Program for Children
The law introduces Trump Accounts as a new tax-advantaged savings program for children who are U.S. citizens at birth and under eight years old. Parents may deposit up to $5,000 per year in a qualifying child’s account, beneficiaries may withdraw at or after age 18 at the preferential long-term capital gains rate. Children born between Dec. 31, 2024, and Jan. 1, 2029, would receive annual deposits of $1,000 from the federal government.
Qualified Business Income (QBI) Deduction for Pass-Through Entities
The law makes permanent the 20 percent deduction on U.S. source qualified business income (QBI) for domestic pass-through entities, such as S corporations, LLCs, partnerships, and sole proprietorships. This provision, which was set to expire at the end of 2025, effectively reduces the taxable income that flows from a business to the owners’ personal income tax returns.
Individuals with at least $1,000 of QBI from one or more active trade or businesses in which they materially participate may also be eligible for a new inflation-adjusted minimum QBI deduction of up to $400 per year.
Clean Energy Tax Credits
The OBBBA terminates many of the clean-energy tax credits introduced by former President Biden under the Inflation Reduction Act. This includes a Dec. 31, 2025, repeal of up to $7,500 in credits for the purchase of a qualifying electric vehicle, up to $3,400 for energy-efficient home improvements (EEHI) and 30 percent of the costs for new, clean energy improvements to residential property.
About the Author: Eric Zeitlin is Founder and Chairman of the Board of Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs and a registered representative with PWA Securities, LLC. He can be reached at the firm’s Fort Lauderdale, Fla., office at (954) 712-8888 or info@provwealth.com.
Provenance Wealth Advisors (PWA), 200 E. Las Olas Blvd., 19th Floor, Ft. Lauderdale, FL 33301 (954) 712-8888.
Eric Zeitlin is a registered representative of and offers securities through PWA Securities, LLC, Member FINRA/SIPC.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
Any opinions are those of the advisors of PWA and not necessarily those of PWA Securities, LLC. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of PWAS, we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Prior to making any investment decision, please consult with your financial advisor about your individual situation.
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Posted on July 29, 2025