What the “One Big Beautiful Bill Act” Could Mean for High-Net-Worth Individuals
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA), a sweeping reconciliation package that includes significant changes to individual and business tax rules. Many of the provisions from the 2017 Tax Cuts and Jobs Act (TCJA) are made permanent, alongside several new provisions that may impact high-net-worth individuals and business owners.
This summary highlights some of the key tax changes included in the OBBBA, as well as considerations for forward-looking tax planning.
Key Highlights
TCJA tax rates and standard deduction made permanent
Expanded deductions for families, seniors, and charitable giving
Increased estate tax exemption and SALT cap modifications
Renewed bonus depreciation and QBI deduction for businesses
Changes to international tax rules, IRS reporting, and clean energy credits
Individual Tax Changes
Tax Rates and Brackets
The lower tax rates introduced by the TCJA are now permanent. The act also adds an additional year of inflation adjustment to certain bracket thresholds.
Standard Deduction
The nearly doubled standard deduction is locked in going forward, with 2025 levels indexed for inflation:
$15,750 for Single/MFS
$23,625 for Head of Household
$31,500 for MFJ
Child Tax Credit
Beginning in 2025, the credit increases to $2,200 per child, adjusted annually for inflation.
Estate and Gift Tax
Starting in 2026, the estate and gift tax exemption is raised to $15 million per individual ($30 million per couple), indexed for inflation.
SALT Deduction Cap
The cap increases to $40,000 per household, with a phase-out beginning at $500,000 of modified AGI. In 2030, the cap reverts to $10,000.
Charitable Giving
An above-the-line charitable deduction returns in 2026: $1,000 for single filers and $2,000 for joint filers, even for those who don’t itemize.
Deductions for Tips and Overtime
For 2025–2028, certain tip income and overtime premiums may be deducted above-the-line, subject to income and occupation limits.
Senior Deduction
A new $6,000 deduction is available from 2025–2028 for individuals age 65+ with income below $75,000 (or $150,000 joint).
Other Individual Provisions
Interest on up to $10,000 in car loans for U.S.-assembled vehicles may be deductible (2025–2028)
Moving expense deduction is permanently eliminated (except for military)
Permanent treatment for home mortgage insurance deduction up to $750,000 in original loan value
Casualty loss deduction expanded to include state-declared disasters
Several popular credits, including adoption, employer-provided childcare, paid leave, and education benefits, are made permanent
Business and International Tax Changes
Qualified Business Income (QBI) Deduction
The 20% QBI deduction is made permanent for qualifying businesses.
Bonus Depreciation
100% bonus depreciation is restored for qualifying property placed in service after January 19, 2025.
Section 179 Expensing
Limits increase to $2.5 million (phase-out starts at $4 million), indexed for inflation after 2025.
Information Reporting Thresholds
1099-K reporting reverts to $20,000 and 200 transactions
1099-NEC/MISC thresholds increase to $2,000 in 2026 and are indexed for inflation thereafter
Opportunity Zones
Opportunity Zone rules are made permanent with revised definitions. Changes begin in 2027.
Clean Energy Credits
Several clean energy credits introduced by the Inflation Reduction Act are eliminated.
Planning Considerations for High-Net-Worth Individuals and Families
While many provisions take effect immediately, others are phased in through 2026 and beyond. A thoughtful, phased approach to planning is key:
Short-term: Review immediate opportunities to maximize deductions, adjust withholdings, or reassess timing of income and expenses
Mid-term: Prepare for future exemptions and thresholds, particularly around estate planning and charitable giving
Long-term: Align investment strategies, business structures, and legacy plans with the evolving tax environment
Strategic Implications for High-Net-Worth Households
For high-net-worth families, one of the most important takeaways from the One Big Beautiful Bill Act is the stability it brings to key tax provisions that were previously scheduled to sunset. With the permanency of the current income tax brackets and the increased estate tax exemption, families can plan with greater confidence.
This clarity supports more deliberate and long-term strategies.
As implementation continues and the IRS releases further guidance, additional nuances will come into focus. Capstone will continue to monitor developments closely and provide timely insights on how these changes may affect high-net-worth tax and estate planning strategies.
Next Steps
As further IRS guidance emerges, it will be important to revisit your planning assumptions and assess whether current strategies remain optimized under the new rules. Capstone’s team of advisors is here to help you understand how these changes apply to your unique situation.
To learn more or begin a planning review, contact us to schedule a consultation.
Disclosures:
This article is not a substitute for personalized advice from Capstone and nothing contained in this presentation is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed by other businesses and activities of Capstone. Descriptions of Capstone’s process and strategies are based on general practice, and we may make exceptions in specific cases. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review by contacting us at capstonefinancialadvisors@capstone-advisors.com or (630) 241-0833.