One Big Beautiful Bill Act: What It Means for Your Taxes

One Big Beautiful Bill Act: What It Means for Your Taxes

The tax law cliff of the 2017 Tax Cuts and Jobs Act was looming going into last year’s elections. In July of this year we had the passing of the One Big Beautiful Bill Act (OBBBA), which did deliver some much-needed certainty—and, as with most things tax-related, a fresh layer of complexity too. It covers everything from deductions and brackets to charitable giving and estate planning. The big takeaway? Some key provisions are now permanent, others are short-lived, and a few popular tax credits are heading for the exits (Kitces, 2024).

 Let’s walk through what matters most for families, business owners, and investors.

 The Main Provisions That Are Now Permanent

The OBBBA locks in several provisions from the 2017 Tax Cuts and Jobs Act. That means less worry about sunsetting and more clarity for planning. Here are a few things you can count on (Kitces, 2024):

• Standard Deduction: Now permanently set at $15,750 for single filers and $31,500 for joint filers.
• Estate Tax Exemption: Raised slightly to $15 million per person—not a huge jump from the previous $13.99 million, but the big win for larger estates is avoiding the scheduled drop to $7 million in 2025.
• Mortgage Interest & Insurance: Mortgage interest remains deductible on loans up to $750,000. Mortgage insurance is once again deductible for those who put less than 20% down and permanent law.
• Bracket Adjustments: Federal tax brackets stay the same, but the 10% and 12% brackets now get an extra inflation boost bringing savings across the board to low and middle-income households.
• High-Income Limits: For those in the 37% bracket, itemized deduction limits now apply.
• Child Tax Credit: Increased to $2,200 per qualifying child and will be indexed for inflation beginning in 2026.

 Temporary Wins: Use ‘Em While You Can

Many provisions have a temporary window from 2025 through 2028, and some a little longer. These items are on the menu—but have a sunset (Kitces, 2024):

• SALT Deduction: The State and Local Tax cap increases from $10,000 to $40,000. It phases out above $500,000 in Modified Adjusted Gross Income (MAGI), with a slow taper until 2029.
• Senior Deduction: An additional $6,000 per person for those 65+, though it phases out between $150,000 and $250,000 MAGI (joint filers) and between $75,000 and $175,000 for single filers.
• No Tax on Tips & OT: Up to $25,000 in tip and overtime income can be deducted.
• Bonus Depreciation: 100% bonus depreciation returns for property placed in service after January 19, 2025.
• New Deduction for Auto Loans: Interest is now deductible on vehicles assembled in the U.S. and purchased by year-end 2024. Capped at $10,000 annually, with phaseouts above $100,000 (single) and $200,000 (joint).

Charitable Giving: A Mixed Bag

• Non-Itemizers: Can deduct up to $1,000 (single) or $2,000 (married) in charitable contributions starting in 2026.
• Itemizers: Face a new 0.5% AGI floor. That means someone with $300,000 in AGI would need to give more than $1,500 to start claiming a deduction (Kitces, 2024).

What’s Going Away

Several clean energy credits are sunsetting (Kitces, 2024):

• Clean Vehicle Credit ($7,500 new, $4,000 used): Ends after September 30, 2025.
• Charging Station Credit ($1,000): Ends June 30, 2026.
• Home Efficiency Credit ($1,200): Ends December 31, 2025.
• Residential Solar Credit (30% of cost): Ends December 31, 2025.

Now What?

The OBBBA gives us a clearer framework, but the details will play out differently for every household. The question isn’t just “What changed?” but rather “What should I do now?” (Kitces, 2024).

 And that’s where we come in.

 At Van Hulzen, we don’t just react to tax law changes—we proactively work with you to translate them into smart decisions. That includes collaborating with your tax advisor, and other professionals to make sure nothing gets lost in the shuffle.

Whether it’s optimizing for charitable giving, reassessing your estate plan, or aligning your business strategy with the new tax code, our team brings decades of experience to help you make confident, informed choices.

 If you’re ready to put this new legislation to work for you, let’s talk.

 We’ll help you connect the dots—so you can focus less on tax law and more on what matters most.

Reference:Kitces, M. (2024, August 12). The One Big Beautiful Bill Act: How new legislation impacts tax planning strategies. Kitces.com. https://www.kitces.com/blog/obbba-one-big-beautiful-bill-act-tax-planning-salt-cap-senior-deduction-qbi-deduction-tax-cut-and-jobs-act-tcja-amt-trump-accounts/

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