The One Big Beautiful Bill: What the 2025 Tax Law Means for You
Signed into law on July 4, 2025, the One Big Beautiful Bill Act delivers major, permanent updates to the U.S. tax code. Whether you’re a retiree, business owner, or young family, the changes in this bill could significantly impact your planning—now and for decades to come.
Here are the most important provisions to know:
1. Bigger Estate Tax Exemption
The federal estate tax exemption increases to $15 million per person ($30 million per couple with portability), starting in 2026.
That’s up from the 2025 exemption of $13.61M.
Why it matters: Families with significant assets have more room to plan and gift without triggering estate taxes. This may be the time to revisit gifting, trust design, and multigenerational legacy strategies.
2. 100% Bonus Depreciation & Expanded Section 179
Businesses can now immediately expense 100% of qualified new property.
Section 179 cap increased to $2.5 million, with a phaseout beginning at $4 million.
Why it matters: Business owners can strategically deduct large purchases and capital improvements, helping manage income and reduce taxable profits.
3. QBI Deduction Made Permanent
The 20% deduction on pass-through business income is here to stay.
Some modest expansion of the phaseout range was included.
Why it matters: While advisors and many white-collar professionals still don’t qualify, many business owner clients do—making this a powerful long-term planning tool.
4. “Trump Accounts”: A New Child-Focused Savings Vehicle
$5,000/year contribution limit (no deduction) per child until age 18.
Employers can contribute up to $2,500 tax-free per year for dependents.
IRS will contribute $1,000 for births in 2025–2028.
Why it matters: A new option for families to build tax-advantaged savings for kids, whether for education, housing, or long-term growth. Employers can also enhance benefits through matching contributions.
5. Higher Standard Deduction + Senior Deduction
Married Filing Jointly: $31,500
Single: $15,750
Heads of Household: $23,625
Additional $6,000 Senior Deduction per taxpayer age 65+ (phases out at $150k MFJ or $75k others, expires in 2028).
Why it matters: This could reduce taxable income significantly for seniors and middle-income families. It’s also a great entry point to discuss Roth conversions and broader retirement tax strategies.
6. Expanded Child & Adoption Credits
Child Tax Credit permanently increased to $2,200 per child, adjusted for inflation.
Adoption Credit is now partially refundable (up to $5,000 starting in 2025).
Why it matters: Planning for growing families just got more flexible, especially for those navigating adoption costs.
7. Car Loan Interest Deduction (2025–2028)
Up to $10,000/year deduction for new car loan interest (not leases).
Phases out above $200k MAGI for MFJ ($100k for others).
Why it matters: For middle-income households and small business owners, this is a rare personal expense deduction worth exploring.
8. Student Loan Repayment Help from Employers
Employers can permanently contribute up to $5,250/year tax-free toward an employee’s student loan payments.
Why it matters: A great tool for businesses seeking to attract and retain younger talent—especially valuable in competitive job markets.
9. 529 Plans Can Now Be Used More Broadly
Expanded qualified expenses now include:
K–12 curriculum, instructional materials, tutoring
Homeschool-related supplies and tech
Educational therapies and dual-enrollment costs
Why it matters: Families using 529 plans for private school, supplemental education, or special needs support can now maximize these accounts far beyond college.
10. QSBS (Qualified Small Business Stock) Gets a Boost
For stock issued after July 4, 2025:
50% capital gain exclusion after 3 years
75% exclusion after 4 years
100% exclusion after 5 years
Exclusion cap raised from $10M to $15M (indexed for inflation)
Gross asset limit increased from $50M to $75M
Why it matters: Founders, investors, and startups now have more exit flexibility, larger tax savings, and stronger incentives for early-stage investment.
11. TCJA Provisions Made Permanent
Many tax cuts from the 2017 Tax Cuts and Jobs Act were set to expire soon. This new law makes them permanent, including:
The current seven tax brackets
Lower capital gains rates
Business deductions and bonus depreciation
Why it matters: This provides long-term tax planning certainty and removes the guesswork around expiring provisions.
A Note About the SALT Deduction
The State and Local Tax (SALT) deduction cap is now $40,000, phasing out between $500k–$600k AGI.
But: It expires after 2029, and married couples don’t get double the cap—adding a potential marriage penalty.
While this change isn’t as relevant in Nebraska or other lower-tax states, it’s important for clients with multiple residences or high-income investments.
What Now?
This legislation creates both opportunity and complexity. Whether you're:
A business owner weighing capital purchases or entity structures
A retiree exploring Roth strategies
A parent planning for your kids or grandkids
…these changes could significantly impact your tax exposure, savings plan, and wealth transfer strategy.
Need help understanding what this means for your unique situation?
Contact us today or feel free to schedule a time to meet Here
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