What the One Big Beautiful Bill Act Means for Your Estate, Taxes, and Business

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”) into law. This sweeping tax and economic package cements core provisions of the 2017 Tax Cuts and Jobs Act (“TCJA”) while introducing new tax benefits for families, retirees, and businesses.

The enactment of the OBBBA marks a significant—and largely favorable development for individuals (particularly high-net-worth) and business owners. By permanently extending central elements of the TCJA and expanding key exemptions and deductions, the law provides greater certainty and flexibility in tax and estate planning. Most notably, the permanent increase in the federal estate and gift tax exemption to $15 million per person in 2026 (indexed for inflation after 2026) offers a powerful opportunity to transfer wealth without triggering transfer tax. Combined with the permanent continuation of the 20% pass-through deduction for certain business structures and the temporary increase of the state and local tax (“SALT”) deduction cap, the law’s changes favor affluent individuals, families, and business owners focused on long-term tax efficiency and estate planning. The OBBBA creates new opportunities that merit a fresh look at your estate plan, business structure, and wealth transfer strategy.

Key Provisions That May Affect You

Permanent Provisions

What does “permanent” mean?
Certain provisions of the OBBBA are “permanent” meaning they do not expire on a set date; however, note that Congress may amend or repeal these provisions in the future. Still, these “permanent” provisions should be considered with respect to long-term planning strategies as such provisions are generally viewed as relatively stable for an indefinite time period.

Estate and Gift Tax Relief

The most impactful change for wealth transfer planning is the permanent increase in the federal estate and gift tax and the generation-skipping transfer (GST) tax exemptions. Starting in 2026, individuals may transfer up to $15 million (indexed for inflation after 2026) and married couples may transfer up to $30 million (indexed for inflation after 2026) either during life or at death without incurring a federal estate or gift tax by using their estate and gift tax exemption. These exemptions are reduced by prior gifts made by an individual or married couple which were not otherwise subject to an exception or exclusion.

The expanded exemptions open new opportunities to:

  • Transfer closely-held business interests, investment portfolios, or other assets tax-efficiently.
  • Accelerate multigenerational wealth strategies.
  • Review and modify irrevocable trusts to take advantage of additional wealth protection.

Pass-Through Business Deduction Extended

The 20% deduction for qualified business income (QBI), initially enacted in 2017, and scheduled to sunset in 2026, is now permanent.  This allows certain taxpayers (including eligible owners of S corporations, LLCs, partnerships, sole proprietorships, and some trusts and estates) to deduct a portion of their qualified income from taxable income, reducing their effective tax rate.

Business owners should:

  • Evaluate their entity structure for eligibility.
  • Consider aggregating business operations or adjusting compensation strategies.
  • Review whether rental or service income qualifies under the updated thresholds.

Additional Business Incentives and Opportunities

In addition to the QBI deduction, the OBBBA provides business owners with an expanded toolbox for growth, reinvestment, and strategic planning by:

  • Increasing Section 179 expensing thresholds and phaseout amounts.
  • Reinstating bonus depreciation for eligible property placed in service after January 19, 2025.
  • Restoring full domestic R&D expensing (domestic research and experimental expenditures can once again be deducted in full in the year incurred), eliminating prior capitalization and amortization requirements.
  • Reinforcing tax credits for capital gains re-invested in Opportunity Funds (Opportunity Zones) with an emphasis on Rural Opportunity Funds. 
  • Improving access to taxable gain exclusion for Qualified Small Business Stock (QSBS), benefiting founders and early investors in eligible C corporations.

Temporary Provisions

Business Incentives and Opportunities

On top of the permanent provisions listed above, the OBBBA also includes temporary provisions providing business owners with potential benefits by:

  • Temporarily introducing new special depreciation for qualified production property (non-residential real property involved in the manufacturing, production, or refining of qualifying products) with construction beginning between January 19, 2025, and January 19, 2029.  This special depreciation could be particularly valuable to certain manufacturers. 
  • Temporarily permitting deductions for interest paid on loans for U.S. assembled personal use vehicles purchased from 2025 to 2028, subject to Modified Adjusted Gross Income (MAGI) limitations.

New Deductions for Seniors and Families

A temporary $6,000 deduction is immediately available for qualifying taxpayers over age 65, subject to income limitations. For high-net-worth retirees with moderate adjusted gross income, this may offer a short-term benefit, especially when coordinated with income smoothing or Roth conversion strategies.

Additionally, families welcoming a child between 2025 and 2028 will receive a one-time government contribution of $1,000 to a new child-focused savings account, intended to encourage long-term educational or housing-related savings.

SALT Cap Increased

The cap on deducting SALT is temporarily increased from $10,000 to $40,000 for 2025 and further increases by one percent annually through 2029. This increased deduction could benefit taxpayers in high-tax jurisdictions until their income reaches the phaseout level.

This change also may affect:

  • Timing and batching of property and income tax payments.
  • Structuring of pass-through entity tax elections (PTET) for state income taxes (i.e., SALT workarounds).
  • Considerations around residency and domicile for business owners and retirees.

Deduction for Tips and Overtime Pay

Workers can individually deduct up to $25,000 in tips and $12,500 in qualified overtime pay ($25,000 for married couples). These deductions are temporary (2025 through 2028) and are subject to limitations based on the taxpayer’s Modified Adjusted Gross Income (MAGI).

Charitable Contributions 

One unfavorable aspect of the OBBBA is new limitations and disallowances on charitable contribution deductions for both individuals and corporations beginning in 2026. 

What You Should Do Now

Revisit Your Estate Plan

Consider updating gifting formulas, generation-skipping provisions, and trust structures to reflect new thresholds.

Review Business Strategy and Tax Structure

With new permanence around the 20% QBI deduction, expanded depreciation rules, and other targeted incentives, business owners should reassess:

  • Entity classification and pass-through eligibility.
  • Section 1202 (QSBJ) compliance for potential long-term gain exclusion.
  • R&D expenditures and capital investment timing.
  • Opportunity Zone investments or rural development projects.

Plan Around Temporary Benefits

Not all benefits are permanent. For example, the increased SALT cap and senior deduction both expire after five years.  Taxpayers incorporating these into a multi-year tax planning strategy should capture value while it’s available.

The OBBBA represents a continuation, and in many ways, a culmination, of the tax reform strategy that began in 2017. The bill delivers certainty in some areas and opportunity in others, especially for families and businesses with complex tax and estate planning needs.

Next Steps

  • Schedule a comprehensive estate plan review.
  • Conduct a business structure and tax strategy evaluation to preserve or maximize available deductions.
  • Reevaluate timing of charitable gifts, business investments, and other planning tools considering both permanent and temporary changes.

TFE | Navigating Wealth, Business, and Legacy-Building with Confidence

We invite you to contact your attorney at TFE to schedule a conference to discuss the OBBBA’s impact on your tax and estate planning.

Disclaimer: This newsletter is for informational purposes only and is not meant to be taken as legal advice. By reading this newsletter, you understand and agree that no information is being provided within the scope of an attorney-client relationship. The topics covered in this newsletter are not comprehensive and should not be substituted for competent legal advice from a licensed attorney.