As of July 2025
By: Anthony Santoro, Esq., William B. Lalor, CFP®, CFA, Kyle Cunningham, EA
The much-anticipated ‘One Big Beautiful Bill Act (OBBBA)’ proposes major changes to the individual, business, and estate tax system. It has become one of the most talked-about pieces of tax legislation in recent years, with broad and lasting implications for individuals and businesses .
This legislation is vast, nuanced, and touches nearly every corner of the tax code, from individual tax rates to business deductions and estate exemptions. In this article, we’ve distilled the most relevant provisions for our clients, households, and business owners.
For a full review of how this bill may affect you, we strongly recommend connecting with your CPA, tax advisor, or financial advisor directly.
Key Changes Affecting Individual Income Tax
1. Income tax rates made permanent: The current income tax brackets (10%, 12%, 22%, 24%, 32%, 35%, and 37%)—originally set by the 2017 Tax Cuts and Jobs Act (TCJA)—are now permanent.
2. Bigger standard deduction locked in: The near doubling of the standard deduction under the TCJA will remain in place. For 2025:
- $15,750 for single filers
- $23,625 for heads of household
- $31,500 for joint filers
These will adjust annually for inflation.
3. New floor for charitable giving for itemizers: Starting in 2026, if you itemize deductions, you’ll need to meet a 0.5% minimum of your adjusted gross income (AGI) to deduct charitable contributions.
4. Charitable deduction for non-itemizers: A permanent above-the-line deduction of up to $1,000 for single filers and $2,000 for joint filers begins in 2026.
5. Limitations for high earners: Beginning in 2026, taxpayers in the top bracket (37%) will see their itemized deductions reduced. Instead of the previously repealed PEASE limitation, deductions will now be reduced by a formula: 2/37 of the lesser of:
- total itemized deductions, or
- income over the 37% threshold.
6. SALT cap relief: The deduction cap for State and Local Taxes (SALT) temporarily increases to $40,000 in 2025–2029, reverting back to $10,000 in 2030. However, the SALT deduction is phased out for high-income taxpayers beginning at a modified AGI of $500,000 for joint filers.
7. Mortgage interest deduction adjustments: The new tax bill follows the framework of the previous TCJA.
- The debt cap remains at $750,000 ($375,000 for separate filers).
- Mortgage insurance premiums can be deducted.
- The deduction for home equity loan interest has been permanently eliminated.
8. Casualty loss deduction: The bill extends the current structure of the casualty loss deduction. Only losses from federally declared (or certain state-declared) disasters will qualify for a personal casualty deduction.
9. New deduction for American-made vehicles: From 2025 to 2028, taxpayers can deduct up to $10,000 in interest paid on loans for certain U.S.-made passenger vehicles, subject to modified AGI phase-out beginning at $200,000 for joint filers.
10. Clean energy credits eliminated: After 2025, the bill phases out several popular tax credits, including those for electric vehicles, energy-efficient home improvements, and residential clean energy.
11. New child investment accounts (“Trump Accounts”) introduced: Children born between 2025–2028 will receive $1,000 in seed money in a new type of tax-advantaged account. Accounts allow for annual contributions up to $5,000 that will grow tax-deferred. Funds become available once the child turns 18 and withdrawals are tax-free if used for qualified expenses (i.e., education, home ownership, or starting a business).
12. QOZ expanded: The Qualified Opportunity Zone (QOZ) program is made permanent and enhanced starting in 2027.
- Basis Step-Up: 10% basis step-up is granted for investments held at least five years.
- Tax-Free Gains: Investments held for at least 10 years are eligible for tax-free gains on the appreciation of the investment within the Qualified Opportunity Fund (QOF).
- The OBBBA creates a new category of funds specifically for investments in rural areas (Qualified Rural Opportunity Fund, QROF), offering enhanced incentives:
- Step-Up in Basis: Investors in QROFs can exclude 30% of their deferred capital gains if the investment is held for at least five years.
- Reduced Substantial Improvement Test: The “substantial improvement” test for investments in existing property within rural Opportunity Zones is lowered to 50% of the adjusted basis, down from 100%.
13. QSBS tax break curbed: Major changes are coming to Qualified Small Business Stock (QSBS) (Internal Revenue Code IRC § 1202) issued after the date of enactment:
- The holding period for gain exclusion is now tiered: 50% after 3 years, 75% after 4 years, and 100% after 5 years.
- The gain exclusion cap per issuer rises to the greater of $15 million (indexed for inflation starting in 2027) or 10× basis, up from $10 million.
- The gross asset threshold increases to $75 million (inflation-adjusted), broadening eligible companies.
Key Changes Affecting Gift & Estate Taxes
1. Higher exemptions made permanent: Starting in 2026, the federal gift and estate tax exemption rises to:
- $15 million per individual
- $30 million per married couple
These will also adjust for inflation annually.
2. Top tax rate unchanged: The 40% tax rate for transfers above the exemption remains the same.
Key Changes Affecting Business Income Tax
1. QBI becomes permanent and broader: The 20% Qualified Business Income (QBI) deduction under §199A for pass-through entities and sole proprietorships is here to stay—and expands in scope.
2. 100% bonus depreciation extended: Full expensing of new and used qualified property is made permanent for purchases after January 19, 2025.
3. New deduction for U.S. production property: A full deduction is available for “qualified production property” placed in service between July 4, 2025, and the end of 2030.
4. Expanded Section 179 expensing: In 2025, the expensing cap rises to $2.5 million with a $4 million phaseout threshold. Both will adjust for inflation moving forward.
5. Immediate R&D expensing for small businesses: Retroactive to 2022, small businesses can continue deducting domestic research and experimentation expenses in the year incurred.
6. PTET elections preserved: The bill leaves Pass-Through Entity Tax (PTET) regimes untouched, allowing states to continue offering workarounds to the federal SALT cap.
7. ERTC refund crackdown: Unless an exception exists, no IRS refunds will be issued for Employee Retention Tax Credit (ERTC) claims filed after January 31, 2024.
8. Student loan repayment benefit made permanent: Employer payments of student loans up to $5,250/year will remain tax-free, with inflation-adjusted caps beginning in 2027.
The Bottom Line
The One Big Beautiful Bill Act introduces wide-reaching changes. While some provisions may benefit individuals and business owners, others phase out popular deductions or introduce new thresholds and limitations.
This overview isn’t exhaustive, but it highlights the changes most likely to influence future planning conversations. If you’re wondering what this means for your financial picture, you’re not alone—our team at Simon Quick is here to help you assess the impact.
Using advanced tools like WealthMetrx™ Benchmarking, we can model how these updates could affect your tax outlook and long-term goals. Connect with your Simon Quick advisor to explore potential strategies—or call or email us at: [email protected] | 973.525.1000
About the Authors
Anthony Santoro, Esq.
Principal / Managing Director, Client Advisor
Mr. Santoro joined Simon Quick in 2022 and currently serves as a Client Advisor. His expertise includes tax, executive compensation, estate planning and wealth transfer. Prior to Simon Quick, Anthony worked as an attorney, where he concentrated his practice on trust and estate planning and administration, representing owners of closely held businesses and principals of private equity funds. At Simon Quick, Anthony provides clients with holistic oversight and counseling at the intersection of law and finance. Mr. Santoro also sits on the Financial Planning Committee which is responsible for identifying financial planning opportunities and disseminating guidance to advisors at the firm.
Mr. Santoro began his financial services career with Ayco, a Goldman Sachs financial planning focused firm. At Ayco, he supported the growing needs of high-net-worth individuals and their family offices. From there, he served as the Director of Financial Planning for an Upstate NY fee-based planning firm with more than $600M of assets under management. Most recently Anthony served as an Attorney in a Trust and Estates Law Firm and as a Partner and Family Office Director with their affiliated RIA.
Anthony graduated with a BS from SUNY Albany and his Juris Doctorate from Albany Law School. He is a member of the New York State Bar Association and Financial Planning Association of Northeastern New York. Anthony is a volunteer with the Flora E. Kippins Foundation and enjoys hiking and skiing with his wife and two daughters.
William B. Lalor, CFP®, CFA
Principal / Managing Director, Client Advisor
Mr. Lalor serves as the Head of Financial Planning where he employs his extensive experience to oversee the firm’s financial planning services. His expertise includes tax, retirement, and cash flow planning, as well as executive compensation. He also manages some of the firm’s family relationships, endowments, and foundations. Mr. Lalor sits on the Financial Planning Committee which is responsible for identifying financial planning opportunities and disseminating guidance to advisors at the firm.
Mr. Lalor began his financial services career at The MDE Group, a New Jersey based wealth management firm. There he was involved with many of the firm’s largest corporate executive financial counseling relationships. Prior to entering the financial services industry, he worked for the telecom company, JDS Uniphase, where he was a Development Engineer managing teams responsible for the design and production of new products.
Mr. Lalor earned an MBA with a finance concentration from Rutgers Business School. He graduated with a BS from Rutgers School of Engineering where he majored in Ceramic and Materials Engineering.
Mr. Lalor became a CERTIFIED FINANCIAL PLANNER™ practitioner in January 2007 after completing Fairleigh Dickinson University’s Program for Financial Planners in 2006. He completed his Chartered Financial Analyst (CFA) designation in 2014.
Kyle Cunningham, EA
Director, Tax
Mr. Cunningham joined Simon Quick Advisors in August of 2024 as a Director on the Family Office team. In this role, he is responsible for assisting high-net-worth clients with tax analysis and strategic planning.
Prior to Joining Simon Quick, Mr. Cunningham began his career with Ayco, a Goldman Sachs Company where he specialized in the tax preparation of Individual Income tax returns for high-net-worth clients. Following his time at Ayco, he joined KFG Tax Services, LLC, a local tax firm in Albany, NY where he served as the Tax Director. In this role, he worked with the financial counseling team and clients on tax analysis and tax planning. Additionally, he worked on a wide range of tax returns for individuals and their entities.
Mr. Cunningham graduated from Pace University with a B.B.A. in Public Accounting and is currently an Enrolled Agent with the Internal Revenue Service. In his free time, he enjoys spending time with his wife and two daughters.
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