The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. If you’ve been following the buzz on social media, you already know that for a new piece of legislation, the “Big Beautiful Bill” has already generated considerable controversy.
The OBBBA overhauls the nation’s current tax structure. With the new law in place, tax planning could become more complex — but you also may be able to seize new opportunities.
Tax planning is a highly individualized process, and it’s wise to seek professional guidance before making any changes. Before you begin, it will be helpful to get a better idea of some of the One Big Beautiful Bill Act’s main provisions.
Tax Cuts and Jobs Act (TCJA) Changes Are Now Permanent
When the Tax Cuts and Jobs Act (TCJA) was passed in 2017, it lowered the tax rate for many tax brackets. It also nearly doubled the standard deduction and increased the child tax credit.
These changes proved to be financially advantageous for many. However, the TCJA was set to expire at the end of 2025. Had that happened, a significant portion of Americans would have reverted to paying higher taxes.
Fortunately for many, the Big Beautiful Bill makes TCJA changes permanent. Here’s a look at the seven income tax brackets for single taxpayers:
- 10%: $0–$11,925
- 12%: $11,926–$48,475
- 22%: $48,476–$103,350
- 24%: $103,351–$197,300
- 32%: $197,301–$250,525
- 35%: $250,526–$626,350
- 37%: More than $626,350
The law permanently eliminates the personal exemption, but it makes the TCJA standard deductions permanent:
- Single: $15,750
- Married Filing Jointly: $31,500
- Head of Household: $23,625
This change may not have a major impact on your financial planning strategies. After all, tax brackets, standard deductions, and child tax credits are effectively the same as they’ve been since 2017.
SALT Caps Are Increasing
Given the rising cost of living, many taxpayers living in high-tax areas are struggling with hefty state and local taxes on top of federal taxes. If you itemize your deductions, state and local tax (SALT) deductions allow you to deduct some of the local taxes you pay from your taxable income.
The TCJA set the SALT cap (the maximum amount of state and local taxes you can deduct) at $10,000. The Big Beautiful Bill temporarily quadruples the cap to $40,000. The cap will increase by 1% each year before reverting to $10,000 in 2029.
The SALT cap increase may offer relief to countless taxpayers. However, if your modified gross income (MAGI) is $500,000 or more, the value of the deduction starts to diminish. If your MAGI is $600,000 or more, the old SALT cap of $10,000 applies.
Depending on your situation, the increase in SALT caps might impact your tax planning. For instance, if you typically take the standard deduction but you pay a substantial amount of state and local taxes, you might find that it makes more financial sense to itemize deductions instead.
The Child Tax Credit Is Permanently Increasing
The One Big Beautiful Bill Act also increases the child tax credit to $2,200, and it will be indexed for inflation starting next year. However, the credit only applies to individual parents making $200,000 or less and married couples making $400,000 or less.
You Can Take Advantage of New and Expanded Deductions
There are many other credits and deductions in the OBBBA. These include an enhanced senior deduction allowing qualified seniors to deduct an additional $6,000 each (whether they itemize or not).
In 2026, the estate, gift, and generation-skipping-tax exemption will permanently increase to $15 million per individual ($30 million for married couples).
The new bill introduces a few unexpected (but pleasant) surprises as well. For example, 529 plan funds can now be used for a wide range of education-related expenses, including professional certifications.
Need Help Overhauling Your Tax Plan?
Tax planning is complex even when you’re already familiar with state and federal tax laws. The One Big Beautiful Bill Act has introduced several brand-new, far-reaching changes, and working with a tax professional can help you avoid costly mistakes.
No matter what stage of life you’re in, Lindenberg Financial is here to help you design the kind of personal financial blueprint that can help you reach your goals. Reach out today to schedule a consultation!