How the One Big Beautiful Bill Act May Affect You

Signed into law on July 4, 2025, the One Big Beautiful Bill Act (OBBB) is bringing a host of changes that could shape your financial landscape. From income and estate tax updates to new deductions for families, retirees, and small business owners, the bill touches nearly every corner of personal finance. Here are key provisions that may affect you.

Tax Brackets and Deductions: What’s Now Set in Stone

Many provisions first introduced in the 2017 Tax Cuts and Jobs Act (TCJA) have now been made permanent and others have been boosted:

  • Permanent Income Tax Brackets: Federal tax brackets remain in place under the new law, with annual adjustments for inflation.

  • Higher Standard Deduction: The increased standard deduction under the TCJA is now permanent and indexed for inflation. The amounts for the 2025 tax year are projected to be $31,500 for married couples, $23,625 for heads of household, and $15,750 for individual filers.

  • Expanded Child Tax Credit: Beginning in 2026, families can claim $2,200 per qualifying child, with annual inflation indexing.

  • Mortgage Interest Deduction Cap: The deduction remains limited to mortgage balances of up to $750,000 for joint filers and $375,000 for single filers.

  • SALT Deduction Temporarily Expanded: The deduction for state and local taxes increases from $10,000 to $40,000 for 2025, phasing out at higher incomes. This change sunsets in 2030 unless it’s made permanent.

  • Estate and Gift Tax Exemption: Starting in 2026, the exemption increases to $15 million per person, with inflation adjustments going forward.

  • AMT Relief Locked In: The alternative minimum tax exemption has been raised permanently, with inflation adjustments.

To see how key provisions compare before and after the new law, download our One Big Beautiful Bill Act Comparison Guide.

Benefits for Families, Seniors, and Workers

The bill introduces temporary benefits aimed at a broad cross-section of Americans:

  • Senior Income Deduction: Retirees age 65 and older with an income below $75,000 ($150,000 for couples) can deduct an additional $6,000 between 2025 and 2028. The deduction phases out above $175,000 for singles and $250,000 for couples.

  • Trump Savings Accounts: These accounts allow contributions of up to $5,000 per child annually, with a $1,000 one-time federal seed contribution between 2025 and 2028.

  • Deductions for Tips and Overtime: Workers can deduct up to $25,000 in tipped income and up to $12,500 (or $15,000 for couples) in overtime pay through 2028. Phaseouts apply to individuals with incomes over $150,000 and $300,000 for couples.

Small Business Owners: Some Big Wins

Entrepreneurs and self-employed individuals also stand to benefit:

  • Pass-Through Deduction Secured: The 20% qualified business income deduction (Section 199A) becomes permanent, with higher income thresholds for service businesses—$75,000 for single filers and $150,000 for joint filers.

  • PTET Deductions Unchanged: Despite discussions to curb them, pass-through entity tax deductions remain intact, helping business owners in high-tax states better manage their federal liabilities.

Other Updates That Could Affect Your Planning

Several new or revised tax rules deserve attention for anyone crafting a comprehensive financial strategy:

  • Charitable Deduction for Non-Itemizers: Beginning in 2026, taxpayers who don’t itemize can still deduct charitable gifts—up to $2,000 for couples and $1,000 for singles. Itemizers will need to contribute at least 0.5% of AGI to qualify for a charitable deduction.

  • Car Loan Interest Deduction: Between 2025 and 2028, those earning under $100,000 (or $200,000 for couples) may deduct interest on up to $10,000 of a car loan for vehicles assembled in the U.S.

  • End of EV and Clean Energy Credits: Federal incentives for electric vehicles and energy-efficient home improvements will expire after 2025.

Additional Provisions Worth Noting

  • 529 Plan Flexibility: Education savings plans can now be used for professional certification expenses, making them more versatile than ever.

  • Student Loan System Changes: Income-driven repayment plans are replaced by standardized repayment options, and new caps are set on graduate-level financial aid.

  • Disaster Relief: Casualty loss deductions are expanded to include damages from state-declared disasters.

  • Foreign Transfers: A new 1% tax now applies to certain foreign money transfers.

  • IRS Direct File Ends: The government’s pilot program for free e-filing will no longer be offered.

  • Targeted Taxes on Universities and Foundations: Certain large institutions face new levies under the act.

Now’s the Time to Reassess

Whether you’re entering retirement, managing a small business, or preparing to send kids to college, the One Big Beautiful Bill Act could reshape your financial outlook for years to come.

To find out how the OBBBA may affect your personal situation, download our checklist, “What Important Issues Should I Consider Regarding Changes Made by the OBBBA?”

At Hassell Wealth Management, we’re helping clients evaluate these changes as part of their financial planning. From tax strategies to estate planning, now is an ideal moment to review your financial plan with a trusted advisor.

Schedule a complimentary 30-minute discovery call with a fiduciary wealth advisor.