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One Big Beautiful Bill Act - An Ultra-High Net Worth Guide

  • Writer: Trevor Cobb
    Trevor Cobb
  • Jul 7
  • 4 min read

Updated: Jul 15

What the One Big Beautiful Act Means for Your Wealth, Taxes, and Legacy

Signed into law by President Trump on July 4th, 2025, the One Big Beautiful Bill Act (OBBBA) enacts sweeping tax reforms, extending and expanding many provisions of the 2017 Tax Cuts and Jobs Act (TCJA), while introducing new planning vehicles and deductions. Unlike the TCJA, many provisions are made permanent—eliminating the need for urgent tax planning before sunsets. However, staggered effective dates and some temporary elements still require strategic planning by families.


One Big Beautiful Bill Act (OBBBA) Impacts on Individuals



Estate, Gift & GST Tax Exemption Permanently Increased


  • 2026 exemptions: $15M individual / $30M married couple, indexed for inflation.

  • Previously, TCJA exemptions were scheduled to halve in 2026. Now, there's no sunset.

  • Planning: Continue lifetime gifting, use irrevocable trusts, and incorporate income tax planning with grantor/non-grantor trusts. Even if your estate is less than the above values and you are domiciled in the state of Washington, you might want to consider pre-death gifting as Washington does not have a gift tax.


Permanent Lower Income Tax Rates + AMT Relief


  • The top income tax rate remains at 37%, rather than reverting to 39.7%.

  • AMT exemptions remain elevated, but phase out more aggressively for high earners.

  • Planning: Coordinate income and deductions to stay within advantageous brackets and to maximize new deductions (e.g., senior deduction).


Temporary Expansion of SALT Deduction


  • The SALT cap rises to $40,000 in 2025 (from $10,000), phasing up through 2029 for earners under $500K. Adjusted by 1% annually, it then reverts to $10,000 permanently afterwards.

  • No change to passthrough entity workaround, which remains a viable strategy.

  • Planning: Use trusts and passthrough entities to manage exposure; aim to stay under income thresholds to benefit.


Standard Deduction Boost + Targeted Deductions


  • New standard deduction: $15,750 (individual) $31,500 (joint).

  • Temporary deductions (2025–2028):

    • $6,000 senior bonus (65+)

    • Tip/overtime income deductions.

      • Note this deduction is based upon what is reported in the W-2 as tips or overtime. Most Seattle area restaurants have moved to a service fee which is not considered a tip for purposes of these rules.

    • $10,000 deduction for domestic vehicle loan interest.

      • Note this deduction phases out for incomes between $100,000 and $150,000 for an individual and $200,000 and $250,000 if you file jointly.

  • Planning: Bunch itemized deductions, time deductible expenses, and explore eligibility for new write-offs.


Repeal of Clean Energy Tax Credits (Individuals)


  • Credits for EVs no longer apply to purchases after September 30th, 2025. Energy-efficient home upgrades must be completed by the end of 2025.

  • Planning: Purchase qualifying assets (cars, solar, HVAC, etc.) before expiration.


Introduction of Trump Accounts


  • New tax-free savings IRA for minors, launching July 2026.

  • Annual limit: $5,000 per beneficiary. Government adds $1,000 for kids born 2025–2028.

  • Planning: Families should consider opening accounts early. Contributions can come from any individual.


Opportunity Zones Reboot


  • New qualified opportunity zones (QOZs) begin post-2027.

  • Does not impact the end of the deferral for investments made prior to 2027.

  • Allow capital gains deferral and potential exclusion.

  • Planning: Use installment sales or delayed gain recognition strategies to align with new zones.




Impacts on Businesses


Investment and Hiring Incentives


  • 100% bonus depreciation made permanent: reinstating what TCJA had scheduled to phase out.

  • Section 179 expensing limit increased to $2.5M.

  • R&D costs fully deductible in year incurred for domestic R&D costs.

  • Reinstates broader business interest deductibility (EBITDA rule).

  • Planning: Revisit cost recovery strategies and determine best approach for R&D transition back to expensing.


Repeal of Clean Energy Tax Incentives (Business)


  • Eliminates clean electricity, energy production, and storage credits.

  • Green New Deal provisions repealed between 2025–2027.

  • Planning: Accelerate clean energy projects and purchasing before loss of credits.


Qualified Small Business Stock (QSBS) Expansion


  • Gross asset cap increased from $50M to $75M.

  • Gain exclusion increased from $10M to $15M.

  • Partial benefit available after 3 years (was 5).

  • Planning: Entrepreneurs may want to choose C-Corp status. Founders, employees, and investors benefit from shorter holding period and higher exclusion.



Impacts on Charities and Donors


University Endowment Tax Increased


Universities with endowments face a new tax with a sliding rate between 1.4% and 8%, depending on the school’s endowment per student. While schools with fewer than 3,000 students are exempt, schools with significant foreign student populations may face higher taxes.


  • Sliding rate: 1.4% to 8% based on endowment/student ratios.

  • Foreign student populations increase tax burden.

  • Schools with <3,000 students are exempt.

  • Planning: Use donor-advised funds (DAFs), charitable trusts, or private foundations for college support rather than giving directly to endowments. This helps the school directly in the current year and helps mitigate the endowment tax effect.


Charitable Deduction Changes


  • New $1,000 universal charitable deduction** for non-itemizers (starts 2026).

  • New credit for gifts to scholarship funds.

  • Floors for itemized deductions begin in 2026:

    • 0.5% floor for individuals in 37% bracket

    • 1% floor for corporations

  • Planning: Accelerate gifts into 2025 to avoid floors; defer gifts for small donors until 2026 to claim universal deduction.



Key Themes & Takeaways


Category

Permanent or Temporary

Key Planning

Estate & Gift Exemption

Permanent

Continue Gifting beyond 2025

Income Tax Rates

Permanent

Time income & deductions across brackets

SALT Deduction

Temporary (2025-29)

Shift Income to qualify for phase-in

Clean Energy Credits

Eliminated

Make purchases before 2025 year-end

Trump Accounts

Starts 2026

Open early to qualify for contributions

QSBS Enhancements

Permanent

Consider C-Corp and 3-year holding strategies

Opportunity Zones

Starts post-2027

Use installment sales for future alignment

Charitable Deductions

Mixed

Accelerate large gifts, defer small ones




Final Thoughts


While depending on ones political views it is possible to be happy of upset at the outcome of the OBBA, however, as advisors our view is this bill becoming an act delivers the “certainty” that wealthy families, business owners, and their advisors have sought. With estate tax cliffs avoided and many key income tax provisions locked in, the pressure to rush planning has eased, but careful timing, entity structuring, and gift optimization are still crucial.


Given the long runway for some provisions and short windows for others, the best approach is to consult with your accounting, estate planning, legal, and wealth advisors in Q3 or Q4 2025 and revisit each year to adjust for phase-ins and thresholds.


If you would like Avantia: A Family Office to help coordinate this for you and your family, please reach out.



Sources and Disclaimers:




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