OBBBA Highlights

The One Big, Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, marks a major overhaul of the U.S. tax code. From deductions and credits to estate planning and small business write-offs, the changes are far-reaching—and in some cases, time-sensitive.

This post offers a high-level overview of the most impactful tax changes for individuals, businesses, and estates. Note it in no way is an all-inclusive list, but highlights areas that affect most taxpayers.

We’ll be releasing detailed breakdowns of key provisions soon on the Profit Above Board blog, so stay tuned.

Individual Taxpayer Changes

✅ Standard Deduction Increased (and Made Permanent...or until it's changed again)

• Married Filing Jointly (MFJ): $31,500

• Head of Household: $23,625

• Single: $15,750

   

✅ New $6,000 Senior Deduction

While the news was all abuzz about making social security non-taxable, they did not make a blanket tax credit for all taxpayers on social security. However, for taxpayers under certain income thresholds, a new tax deduction will be applied.

• Available for taxpayers 65+

• Phaseout begins at:

  • $150,000 MFJ

  • $75,000 Single

• Must provide a valid Social Security number to claim

❌ Social Security Still Taxed

• Despite campaign promises, Social Security income remains taxable...but the Senior tax deduction mentioned above makes social security in effect not taxed for those under the thresholds

✅ SALT Deduction Temporarily Raised

• Cap increased to $40,000 MFJ (or $20,000 MFS) through 2029

• Phaseout begins at:

  • $500,000 MFJ

  • $250,000 Single

• For high earners, the SALT deduction reverts back to $10,000 cap in 2025 and back for all taxpayers in 2030

Read more $40k SALT Deduction Sounds Great - But is PTE Tax Still the Better Move?

✅ "No Tax on Tips" Deduction

• The deduction is limited to tips received in occupations that “traditionally and customarily” receive tips, as determined by the Treasury.

• Deduction for up to $25,000 of reported tip income

• The deduction is subject to income phaseouts:

  • Begins phasing out at $150,000 (Single) / $300,000 (MFJ)

  • Fully phased out at $400,000 (Single) / $550,000 (MFJ)

• Tips must be voluntary cash tips, not service charges or negotiated amounts.
• The deduction does not exempt tips from Social Security and Medicare taxes.
• It applies only if reported properly on W-2, 1099-K/NEC, or Form 4137.

So despite the name, “No Tax on Tips,” this is a deduction — not an exclusion — and income and payroll taxes still apply.

✅ Trump Savings Accounts for Children

• Available for kids born 2025–2028

• $1,000 federal seed deposit if elected on your 2025 tax return

• Up to $5,000 in annual contributions (after-tax)

• No access to funds until age 18; withdrawals taxed like traditional IRA income

Read more Trump Child Savings Accounts Explained: Rules, Limits and Benefits

❌ EV & Solar Credits Ending

• Clean Vehicle Credits end after September 30, 2025

• Residential Solar and Battery Storage Credits end after December 31, 2025

• Other energy efficiency credits are also repealed or reduced

Read more about at  Solar and EV Tax Credits Are Ending with OBBBA: What You Must Do Before 2025 Ends

Business Tax Changes

✅ §199A QBI Deduction Made Permanent

• 20% deduction for pass-through income stays

• New phaseout thresholds in 2026:

  • $494,600 MFJ

  • $247,300 Single

     

✅ 100% Bonus Depreciation Reinstated

• Applies to property acquired after Jan 19, 2025

• Includes used equipment and newly eligible “qualified production property”

✅ §179 Expensing Limits Raised

• New max deduction: $2.5 million, with phaseout starting at $4 million

• Indexed for inflation starting in 2026

✅ Paid Family Leave Credit Expanded

• Applies to wages or insurance premiums paid by the employer

• Credit up to 25%, even if no leave is used in the year

✅ Employer Childcare Credit Increased

• From 25% to 40%, up to 50% for small businesses

• Annual cap increased to $500,000

   

❌ ERC Claims Closed

• No ERC refund claims accepted after July 4, 2025

• Applies to any wages paid after June 30, 2021

   

Estate & Gift Tax Changes

✅ Estate & Gift Exemption Raised to $15 Million

• Effective January 1, 2026

• Applies to lifetime gifts, estate transfers, and generation-skipping transfers

• Indexed for inflation annually thereafter

🎯 Planning Tip: The expanded exemption provides a major opportunity for high-net-worth families to make strategic gifts or transfer wealth tax-efficiently before future political shifts. 

 

Final Thought: Start Planning Now

The OBBBA changes offer major opportunities for tax savings, but many come with phaseouts, sunset dates, or eligibility limits. Now’s the time to revisit your strategy and prepare for what’s ahead. 

📅 Let’s Talk: Schedule Your 2025 Tax Planning Review

Whether you're a business owner, parent, retiree, or high-income earner, your tax plan needs to reflect these updates.

This is just a high-level overview. We’ll be publishing in-depth breakdowns of major provisions in the coming weeks—exclusively on the Profit Above Board blog.

Our year-end tax planning sessions will be on our booking calendar in the coming months.  Schedule your call with us and secure your consultation time in advance.

Want help maximizing the new deductions, avoiding tax traps, and protecting your wealth under the OBBBA? Let’s meet before year-end.