The sweeping legislation of the “One Big Beautiful Bill” permanently extends many of the individual tax reductions introduced under the 2017 Tax Cuts and Jobs Act (TCJA). This includes lower tax rates, expanded brackets, and the elevated standard deduction. For most of us, that means sidestepping a substantial tax increase that loomed at the end of 2025. We felt it would be prudent to provide a quick summary of some of the OBBB’s changes:
New Tax Relief
The bill also brings new, targeted relief. Starting in 2025 and lasting through 2028, you can deduct up to $25,000 in tip income and $12,500 in overtime pay. These deductions phase out for incomes north of $150,000 ($300,000 for joint filers).
Furthermore, the deduction for interest on auto loans now applies to up to $10,000 for U.S.-made vehicles if your Modified Adjusted Gross Income is less than $100,000 ($200,000 if Married Filing Jointly).
Supporting Families And The Next Generation
Parents will welcome enhancements to the Child Tax Credit, which increases by $200 per child and becomes a permanent benefit. And for newborns, the bill spawns “Trump Accounts”—tax‑advantaged savings accounts seeded with $1,000 from the government, and the ability for parents to contribute up to $5,000 annually.
Estate Planning And SALT Benefits
Estate tax planning takes a leap forward: the lifetime exemption soars to $15 million per individual ($30 million for married couples), with indexing for inflation. On the deduction front, the state and local tax (SALT) cap quadruples to $40,000, phasing upward by 1% annually through 2029 before reverting in 2030. This deduction phases out for incomes north of $500,000.
A Major Win For Retirees
Perhaps most impactful for seniors: the new senior deduction allows up to $6,000 for individuals (or $12,000 for couples) against Social Security income — lifting the share of seniors exempt from federal taxation from 64% to 88%. This becomes especially meaningful in high‑cost areas where housing taxes and living expenses weigh heavily on retirees’ budgets.
Small Business And Planning Power Moves
Small business owners and entrepreneurs gain traction here, too. The bill restores full first‑year expensing for equipment, R&D, and new buildings; it also cements the 20% pass‑through business income deduction.
What This Means For You — And What You Can Do
This new law brings strong incentives and planning opportunities — but also complexity. Whether you’re thinking about retirement, starting a family, planning your estate, or managing a small business, now is the time for a strategic review:
Retirees should assess eligibility for the senior deduction and how it interacts with Social Security and standard deductions.
Families can capitalize on increased child tax credits and explore Trump Accounts for newborns.
Homeowners in high-tax states may benefit from the elevated SALT cap.
Estate planners can seize the expanded exemption as part of long-term succession strategies.
Business owners should explore accelerated deductions, bonus depreciation, and strategic business entity structuring.
An Advisor Can Help You Make Sense Of The OBBB
We hope this summary provides a starting place for your review of this expansive tax package. Speaking with your trusted advisor on how the “One Big Beautiful Bill” impacts your personal situation can make sense for proper planning as we close out the year.
Find out more about CRA Financial and what they can do for you.
