What the new One Big Beautiful Bill Act (OBBBA) means for your tax planning
You may have heard whispers about it—or maybe just seen it trending under its nickname: the “One Big Beautiful Bill.” Signed into law on July 4, 2025, this sweeping tax and spending legislation (officially: the One Big Beautiful Bill Act, or OBBBA) is packed with real implications for individuals, business owners, and investors alike.
At Epic, we’re already working behind the scenes to help clients turn this legislation into a long-term opportunity. Here's what you need to know—and why now is the time to act.
1. Many 2017 Tax Cuts Are Now Permanent
Let’s start with what’s staying: The lower income tax brackets from the 2017 Tax Cuts and Jobs Act (TCJA) are now here to stay! That includes the current 10%, 12%, 22%, 24%, 32%, 35%, and 37% rates. The higher standard deduction has also been locked in—with an additional bump for 2025.
Why this matters: These brackets offer significant planning opportunities. If your income is projected to grow, this may be your final window to leverage today’s lower rates before other offsets (like capped deductions) dilute your advantage.
2. The Child Tax Credit & Estate Tax Exemption Are Getting a Boost
The child tax credit increases to $2,200 per child, permanently. Meanwhile, the estate and gift tax exemption will be raised to $15 million per person in 2026—a significant shift in long-term legacy and wealth planning.
Why this matters: If you’re considering trusts, lifetime gifts, or multi-generational planning, now is the time to lock in strategies that align with these new thresholds.
3. Business Owners, Your Deductions Just Got Better
One of the biggest wins for business owners is the permanent extension of the 20% Qualified Business Income (QBI) deduction. Additionally, bonus depreciation is back—that means you could potentially qualify to deduct up to 100% for qualifying property placed in service after January 19, 2025. And Section 179 limits have more than doubled.
Why this matters: With higher expensing limits and a new $400 minimum QBI deduction, businesses of all sizes can reduce taxable income dramatically—if planned correctly. Now is the time to review entity structure and purchasing decisions.
4. Temporary Deductions with Major Appeal
New short-term deductions may fulfill some long-awaited promises, including:
“No Tax on Tips”: Up to $25,000 in tip income may now be excluded for service workers (2025–2028).
“No Tax on Overtime”: A new deduction of up to $12,500 ($25,000 for couples) on qualified overtime pay.
“No Tax on Car Loan Interest”: This one is still up in the air, but there’s potentially up to $10,000 annually in interest on U.S.-made vehicle loans may be deducted for 2025–2028.
Senior Deduction: Those turning 65 may claim a new $6,000 deduction, phased out for higher incomes.
Why this matters: If you or your employees qualify for any of these, these could be meaningful ways to reduce taxable income—but they’re temporary, so planning ahead is essential.
5. Other Big Changes to Watch
SALT Deduction: Temporarily increased from $10,000 to $40,000 for 2025–2029, with inflation adjustments.
Electric Vehicle Credit: The EV tax credits are going to expire effective September 30th 2025! So if you’re planning to buy a new or used EV for tax credit purposes, you’ll want to do it before the end of September to qualify.
"Trump Accounts" for Kids: New $5,000/year tax-deferred accounts for minors, with a $1,000 federal contribution for kids born 2025–2028.
Why this matters: If you’re relying on EV credits, planning gifts for children, or considering the strategy now looks very different.
Let’s Turn Legislation Into Opportunity
The OBBBA is a massive overhaul—impacting income, business, estate, and even personal deductions. With our Phoenix office now accepting Tax Planning clients, this is your window to maximize today’s law before tomorrow changes the game again.
Let’s work together this tax season to ensure your deductions align with your goals and make the most financial sense for you.
Let’s keep more of what you’ve earned.
Let’s get to work.
