The One Big Beautiful Bill Act: What Investors Need to Know for 2025 and Beyond
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) became law—making waves in the tax world and giving both individuals and businesses new planning opportunities. While the name sounds like a fireworks show, the bill itself is more of a long-term play: it makes many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) permanent and sprinkles in some fresh tax breaks.
Here’s our plain-English guide to what matters most for you.
1. Individual Tax Rates: Certainty at Last
The OBBBA permanently extends the TCJA’s individual tax cuts, which were set to expire at the end of 2025. These brackets will continue to adjust for inflation over time—good news for planning ahead.
What it means for you:
- Retirees-in-training: Knowing where tax rates are headed makes it easier to map out income and withdrawals.
- High earners: Consider income-smoothing strategies, such as Roth conversions in lower-income years, to keep tax brackets in check.
2. Deductions and Credits: Some Upgrades, Some Limits
The standard deduction rises to $15,750 for singles and $31,500 for couples, with inflation adjustments built in. The child tax credit bumps up to $2,200 per child. Mortgage interest deductions remain limited, and some clean energy credits are on the chopping block after 2025.
Temporary sweeteners (through 2028–2029) include:
- No tax on tips (up to $25k) or overtime (up to $12.5k)
- Car loan interest deduction for new purchases of U.S.-assembled passenger vehicles (2025–2028)
- Bigger SALT deduction limits
- An extra $6,000 standard deduction for seniors over 65
Action steps:
- Rethink charitable giving strategies—new rules may change the math.
- Use temporary breaks for short-term planning wins, especially if a big-ticket car purchase is on your horizon.
3. Estate Planning: A Bigger Window for Wealth Transfer
The federal estate and gift tax exclusion jumps to $15 million per person ($30 million per couple) starting in 2026, indexed to inflation. That’s up from a scheduled $7 million drop—and the valuable step-up in basis stays.
Why it matters: If your estate plan was built with the old limits in mind, you may have more flexibility now. This is a good time to revisit gifting strategies, trusts, and beneficiary designations.
4. Business Benefits: More Deductions, More Potential
Small business owners, take note:
- The 20% Qualified Business Income (QBI) deduction is now permanent.
- Expanded Section 1202 rules allow bigger capital gains exclusions for Qualified Small Business Stock, with phased benefits starting in year three.
Translation: Structuring your business wisely could mean keeping more of what you earn.
5. Investment Incentives: Opportunity Zones Are Back (and Bigger)
The OBBBA restarts and expands Opportunity Zones in 2027, with special perks for rural investments—like a 30% basis step-up after five years. These programs could help defer capital gains and potentially grow them tax-free over time.
Reminder: These are long-term plays. Make sure they fit your overall investment plan before diving in.
The Bottom Line
The OBBBA isn’t just a tax tweak—it’s a set of tools that could shape your financial strategy for years to come. The key is matching the opportunities to your unique situation.
Next step: Let’s review your portfolio, tax plan, and estate documents together to make sure you’re positioned to benefit from the changes—and avoid unintended surprises.
Call us at 215-348-3176 or email to schedule your OBBBA strategy session.
About Phil Rosenau
As a graduate of Germantown Academy, Phil Rosenau earned his bachelor’s degree in economics at Drew University, while also earning a minor in business management. His passion for creating and maintaining business relationships drove him to join the Prudential Advisors team, where he met Charlie and Ricardo before starting Paragon Wealth together.
Phil is a lifelong resident of Bucks County and the son of a local entrepreneur. He understands the unique needs of small business owners, takes pride in providing his clients with the knowledge to understand their unique financial situation, and helping them navigate their financial future with confidence. He enjoys spending time with his wife, Caroline, and two children, he is the current president of the MDM networking group, and he is active with the local CrossFit community. Phil is also proud to be part of the Drew University Lacrosse Legacy where he played all four years. You can find Phil here on LinkedIn, or here on Facebook.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Paragon Wealth Management and Great Valley Advisor Group are separate entities from LPL Financial.