On July 4, 2025, President Donald J. Trump signed the One Big Beautiful Bill (OBBB) into law, marking the most extensive changes to the federal tax code since 2017. The new law touches nearly every aspect of the tax system, impacting estate planning, business deductions, personal income tax rules, and international compliance.
While many provisions will not take effect until 2026, some changes are already in place for tax year 2025. Now is the time to begin evaluating how these updates could affect your personal and business finances. Below is a summary of the most important changes and what individuals and business owners should think about today.
Estate and Gift Tax Updates
One of the OBBB’s most talked-about provisions is the permanent increase in the federal estate, gift, and generation-skipping transfer (GST) tax exemption. Beginning January 1, 2026, the exemption will rise to $15 million per person, adjusted for inflation. This avoids the previously scheduled rollback that would have lowered the exemption to approximately $7 million.
For individuals and families with existing estate plans – or those considering gifting strategies – this is an opportunity to revisit those plans and determine whether updates are needed to take advantage of the expanded limits.
Business Tax Changes Worth Reviewing
The new law includes several business-friendly changes that could directly impact capital investment and long-term tax planning:
- 100% Bonus Depreciation is restored and made permanent for qualifying property placed in service after January 19, 2025.
- Section 179 Expensing limits increase to a $2.5 million cap, with a $4 million phaseout.
- The Section 199A deduction (for Qualified Business Income) becomes permanent and now includes expanded eligibility and baseline deductions for smaller businesses.
- Opportunity Zones receive permanent renewal, with new rules to strengthen oversight and allow rolling 10-year designations.
- Qualified Small Business Stock (QSBS) benefits expand, with a higher exclusion cap and shorter holding period to qualify for partial gains exclusion.
The law also extends R&D expensing, modifies the business interest deduction rules, and permanently establishes the New Markets Tax Credit. Business owners should review their capital investment plans and consult with their tax advisors to ensure they are positioned to benefit from the new rules.
Key Changes for Individual Taxpayers
Several updates in the OBBB build on the structure of the 2017 Tax Cuts and Jobs Act, while adding new relief measures:
- The standard deduction remains elevated and will continue to adjust for inflation.
- The Child Tax Credit increases to $2,200 in 2026, with inflation adjustments.
- The SALT (State and Local Tax) deduction cap temporarily increases to $40,000 for joint filers between 2025 and 2029 before returning to $10,000.
- New above-the-line deductions for tip income, overtime pay, and specific auto loan interest will be available.
- A new $6,000 senior deduction is available between 2025 and 2028, subject to income limits.
- Charitable contribution rules are updated to include a small above-the-line deduction and new thresholds for itemized filers.
These changes will be particularly relevant for retirees, middle-income families, and those who rely on tips or hourly wage bonuses.
International Tax and Compliance Revisions
For multinational businesses, the OBBB introduces several structural changes:
- GILTI is rebranded as NCTI (Net Controlled-Territory Income)
- FDII becomes FDDEI (Foreign-Derived Deduction Eligible Income)
- BEAT (Base Erosion and Anti-Abuse Tax) is overhauled with new deduction and rate formulas
The law also reinstates Section 958(b)(4), expands eligibility for foreign tax credits, and imposes a 1% excise tax on certain cross-border payments.
Businesses with global operations must review their current structures and compliance procedures in light of these changes, especially around sourcing rules and the credibility of foreign taxes.
Other Noteworthy Provisions
- Employee Retention Credit (ERC): Claims submitted after January 31, 2024, are no longer valid, even if they were previously eligible.
- Excess Business Loss Limitation: Now a permanent part of the tax code, with adjustments.
- Affordable Care Act (ACA): Tighter verification requirements and stricter rules for certain special enrollments.
- Affordable Housing and Rural Development Incentives: Expanded to support investment in historically underserved communities.
What to Do Now
With some changes already in effect and others on the horizon, now is the right time to take stock. Taxpayers and business owners should consider:
- Revisiting estate and gifting strategies ahead of the 2026 exemption increase
- Adjusting capital expenditure and depreciation plans for 2025 and beyond
- Reviewing eligibility for business incentives like the 199A deduction
- Reassessing charitable giving, trust structures, and cross-border operations to ensure continued compliance and efficiency
Guidance from the IRS and Treasury will continue to shape how many of these provisions are implemented. Working with an experienced tax advisor will help prepare you for what’s ahead.
About the Author
Kelly Swartz is a tax attorney at Widerman Malek with extensive experience helping individuals, families, and businesses navigate a wide range of federal and state tax matters. Her practice includes estate planning and gift tax planning, corporate tax strategy, and regulatory compliance. She provides clients with practical, forward-thinking advice in a constantly changing tax environment.
Need Help Planning for the New Tax Law?
At Widerman Malek, we can help you understand exactly how the One Big Beautiful Bill affects your tax strategy and develop a custom plan to minimize risk, maximize savings, and ensure compliance. Schedule a free consultation with Kelly Swartz to protect your financial future.
