The One Big Beautiful Bill Act (OBBBA) was signed into law in July 2025. This bill becomes effective in 2026 and beyond. In addition to making permanent many of the 2017 Tax Cuts and Jobs Act (TCJA) provisions that were set to expire, it added some new deductions and provisions.

Tax Changes

Existing income tax rates are extended permanently, and the lowest two brackets will receive additional inflation adjustments. This will have the effect of lowering taxes—at least a little—for all individual taxpayers.

The high standard deduction is made permanent ($16,100 for single filers and $32,200 for married couples filing jointly) and will increase with annual inflation adjustments. Non-itemizers can take a new, permanent above-the-line deduction of up to $1,000 (single) or $2,000 (married filing jointly) for cash contributions. Itemizers in the highest tax bracket will find the tax benefit of charitable deductions capped at 35% of the amount contributed.

The Estate and Gift Tax Exemption increased significantly to $15 million per individual or $30 million for married couples. These will also be increased with annual inflation adjustments.

The cap on the State and Local Tax (SALT) deduction increases to $40,000 (adjusted for inflation) from 2025 through 2029, with a phase-down for high-income earners.

Trump Accounts (530A)

A new type of tax-advantaged savings Account for children born between 2025 and 2028 may be established, starting in 2026. The details have yet to be worked out, but there are some things we know.

The accounts are kind of a cross between an IRA and a 529 college savings account. There isn’t a tax deduction for individual contributions.
There are no income limits to determine eligibility to establish or fund an account.
Contributions may only be made to the accounts until the account beneficiary is 18 years old. At that time, the account will become an IRA and IRA rules will govern. Current literature suggests the accounts will become traditional IRAs. Given the after-tax contributions, my hope is that they will become Roth IRAs. More guidance is expected in the future.
The accounts may be converted to an ABLE account for qualified individuals.
The accounts may receive up to $5,000 per year in individual contributions from just about any source—family, friends, employers, et al.
Employers can contribute up to $2,500 to the account of an employee’s child. These contributions are tax-free for the employer.
Local, state, and federal governments—and possibly charities—can also contribute tax-free to a child’s account. These contributions don’t count toward the annual $5,000 limit. Tax-free contributions will be taxed differently from the after-tax contributions when withdrawn.
Newborns born between the beginning of 2025 and the end of 2028 are expected to receive a federal grant of $1,000. More details are expected on this grant.
Trump accounts will become available in 2026 with the first contributions allowed after Independence Day.
At this time, it isn’t clear who will open the account or where it will be held.

Student Loans

The Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) student loan forgiveness plans are eliminated entirely.

Employer Provisions

The tax credit for employer-provided childcare is significantly enhanced from a maximum credit of $150,000 to $500,000.

There are some powerful opportunities coming from the OBBBA. Please consult with the appropriate tax, legal, and financial professionals on issues pertaining to these provisions.

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