“The future belongs to those who believe in the beauty of their dreams.”
-Eleanor Roosevelt
The OBBBA is not just a concept—it’s real, and it’s here. It introduces several new provisions, along with updates and extensions to existing guidance. Keep reading to learn how these changes could affect your business or personal finances.
Individual Tax Filing Impacts
Lower & Fewer Financial Tax Brackets:
The number of brackets was reduced from 7 to 5, with the applicable tax rates ranging from 10% to 37%.
Standard Deduction Rate Increase:
This amount was increased and inflation-adjusted. No other personal exemptions will be allowed unless you are a senior.
NEW Senior Deduction:
For tax years 2025–2028, individuals aged 65 or older are eligible for an additional $6,000 senior deduction.
Mortgage Interest Deduction Cap:
Only $750K can be deducted permanently (or $375K for MFS) for home loans, and PMI is now considered deductible.
Charitable Giving:
Non-itemized filers can now deduct $1,000 of their cash donations to charity.
State and Local Tax (SALT) Deduction Increase:
The deduction amount for SALT taxes paid was raised from $10,000 to $40,000.
Trump Account Credit:
Families with children under eight who open a Trump account are eligible for a one-time $1,000 credit.
Overtime & Tip Tax Exemptions:
Eligible employees can deduct up to $25,000 of tip income and $12,500 of overtime premium wages.
Business and Estate Tax Filing Impacts
Bonus Depreciation & Interest Deduction:
100% Bonus depreciation can be used for assets purchased after January 19, 2025. This also now includes “Qualified Production Property.” Qualified auto loan interest is now tax-deductible.
R&D Tax Credit:
Eligible businesses with under $31M in receipts may be able to retroactively claim tax relief for 2022–2024 R&D spending.
QBI Small Business Deduction:
The 20% Qualified Business Income deduction is now permanent, and the eligibility range has been expanded.
Estate & Gift Taxes:
Starting in 2026, limits rise to $15M per person and $30M per couple.
Some of these changes will not be applicable until the next filing year. However, it’s important to begin planning early and consult with your tax professional to maximize potential benefits and avoid unnecessary taxes.
