Washington has unveiled what might be the most sweeping tax legislation in decades: the One Big Beautiful Bill Act (OBBBA). From individual tax brackets to estate planning rules to business deductions, the Act touches nearly every corner of the tax code. Whether you’re planning for retirement, running a business, or thinking about your legacy, here’s what you need to know.

Individual Income Tax Changes

• Permanent Tax Brackets – The seven brackets from the 2017 Tax Cuts and Jobs Act (TCJA) remain in place: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
• Higher Standard Deduction – Indexed annually: $15,750 (single), $23,625 (head of household), $31,500 (married filing jointly).
• Charitable Giving Rules – Starting 2026, itemizers must donate at least 0.5% of AGI. Non-itemizers may deduct up to $1,000 (single) or $2,000 (joint).
• Deduction Limits for High Earners – New phaseout formula for top bracket taxpayers in 2026.
• SALT Deduction Changes – Cap rises to $40,000 until 2029, drops back to $10,000 in 2030. Begins phasing out at $500,000 AGI.
• Mortgage & Casualty Losses – $750,000 mortgage interest cap remains; home equity interest deductions are permanently gone. Casualty loss deductions only apply to declared disasters.
• Vehicle Loan Interest Deduction – Between 2025–2028, deduct up to $10,000 of interest on U.S.-made vehicles, with income-based phaseouts.
• Clean Energy Credits Phase Out – Incentives for EVs, solar, and efficiency upgrades wind down after 2025.
• “Trump Accounts” for Newborns – $1,000 seed deposits for children born 2025–2028. Families can contribute $5,000 annually; withdrawals tax-free at 18 for education, housing, or starting a business.
• Opportunity Zones Expanded – Permanently extended, with new rural-focused incentives starting in 2027.
• QSBS (Qualified Small Business Stock) Gains – Partial exclusion at 3 and 4 years, full exclusion at 5 years. Exemption caps increase, with inflation indexing.

Gift & Estate Tax Updates

• Higher Exemptions – $15 million per person and $30 million per couple starting in 2026 (indexed for inflation).
• Top Rate Steady – The estate and gift tax rate remains at 40%.

Business Tax Changes

• QBI Deduction Remains – The 20% deduction for pass-through entities and sole proprietors stays in place, with expanded scope.
• Permanent Bonus Depreciation – 100% expensing for assets placed in service after January 19, 2025.
• Production Property Deduction – Full expensing for qualifying property between 2025 and 2030.
• Section 179 Expansion – For 2025: $2.5 million expensing cap, $4 million phaseout threshold. Both indexed for inflation.
• R&D Expenses for Small Businesses – Immediate deduction continues, retroactive to 2022.
• Pass-Through Entity Tax (PTET) – States can continue offering SALT deduction workarounds.
• Employee Retention Tax Credit (ERTC) – Refund claims restricted after January 31, 2024.
• Student Loan Repayment Benefits – Employers may contribute up to $5,250 annually, tax-free, with inflation indexing beginning in 2027.

The OBBBA creates opportunities and challenges for individuals, families, and business owners. While some popular provisions are locked in permanently, others begin to sunset or phase out. Strategic tax and estate planning will be critical in the years ahead.

At Denver Private Wealth Management, our advisors stay on top of legislation like the OBBBA so you don’t have to. We can help you:

• Evaluate how the higher estate exemption affects your legacy planning
• Reassess your charitable giving strategy under new rules
• Optimize your business deductions and entity structure

CLICK HERE to schedule a conversation with Denver Private Wealth Management to explore how the OBBBA could affect your financial plan.

DPWM

Denver Private Wealth Management is an independent fee-based financial planning practice with 80+ years of experience in the financial industry. DPWM customizes portfolios based on your financial goals and works closely with you, your tax advisors and estate attorneys to form a comprehensive view of your financial situation. For more information or to set up a free consultation, contact us at info@denverpwm.com.