One Big Beautiful Bill - What It Could Mean for Your Financial Plan
On July 4, 2025, President Trump signed the One Big Beautiful Bill (OBBB) into law. While its name makes headlines, the real story lies in the broad scope of changes it introduces—across individual taxes, retirement policy, small business incentives, estate planning, and social programs.
At Three Sixty Wealth Management, we’re committed to helping you understand how policy shifts impact your financial strategy. Below is a breakdown of some of the bill’s most relevant provisions.
Individual Tax Changes
- 2017 Tax Cuts Made Permanent
- Lower individual income tax brackets: Retains the reduced rates across all brackets
- Doubled standard deduction: Keeps the higher standard deduction—$13,850 (single) and $27,700 (married) in 2024, adjusted annually.
- Elimination of personal exemptions: Continues the removal of the $4,050 per-person exemption from pre-TCJA rules.
- Expanded child tax credit: Maintains the $2,000+ per child credit and expanded refundability.
- AMT relief: Retains the higher exemption thresholds for the Alternative Minimum Tax (AMT), meaning fewer households are subject to it.
- SALT Deduction Cap Expanded
- Raised to $40,000 for joint filers with AGI under $500,000, effective through 2028.
- New Tip & Overtime Deduction
- Up to $25,000/year of tip and overtime income is now deductible for qualifying wage earners.
- Social Security Payroll Tax Deduction
- Up to $2,500/year in payroll tax payments can be deducted for working individuals, including seniors.
- Senior Deduction (65+)
One of the most impactful—and widely discussed—elements of the new bill is the enhanced standard deduction for taxpayers age 65 and older. This change may reduce or eliminate federal tax liability for millions of retirees, especially those with moderate taxable income.- What Was the Old Deduction?
- Before the bill, the standard deduction for seniors (age 65+) in 2024 was: $15,700 for single filers, $30,700 for married couples (both over 65)
- These figures included the base standard deduction plus an age-based “senior bump” of $1,950 per person.
- What’s Changing?
- Beginning in tax year 2025, the bill introduces a new senior deduction of:
- An additional $6,000 for single taxpayers age 65+
- An additional $12,000 for married couples where both spouses are 65+
- This is on top of the existing standard deduction, bringing the new total to: $23,750 for single seniors, $46,700 for senior couples (if both are over 65)
- Income Phaseouts
- The new senior deduction phases out for higher earners:
- Begins to phase out at $75,000 AGI for individuals with complete phase out at $175,000
- For couples filing jointly, phaseout begins at $150,000 and ends at $250,000
- This means high-income retirees may see no benefit from the new deduction—but many middle-income clients could experience meaningful tax relief.
- What Was the Old Deduction?
- Child Tax Credit Increased
Now $2,500 per child, with higher income thresholds before phaseout.
Small Business & Investment Changes
- Section 179 Expensing Limit Raised
- Increased to $2 million for immediate expensing of qualified business equipment.
- Bonus Depreciation Extended
- 100% bonus depreciation continues through 2027, phasing down after that.
- Pass-Through Deduction Made Permanent
- The 20% Qualified Business Income (QBI) deduction is no longer set to expire.
- Auto Loan Interest Deduction (U.S. Cars Only)
- Up to $5,000/year in interest on new, U.S.-assembled vehicle loans is now deductible.
Retirement & Estate Planning
- Estate Tax Exemption Sunset Extended
- The federal estate tax exemption—currently $13.61 million per person (or $27.22 million per married couple)—was originally set to sunset at the end of 2025, dropping back to approximately $6.5–7 million per person depending on inflation adjustments.
Under the One Big Beautiful Bill, that sunset has been delayed to the end of 2029, giving affluent families additional time to execute estate and gifting strategies under current favorable thresholds. This is a critical window for those with large estates, especially when combined with spousal portability, grantor trusts, and gifting programs.
- The federal estate tax exemption—currently $13.61 million per person (or $27.22 million per married couple)—was originally set to sunset at the end of 2025, dropping back to approximately $6.5–7 million per person depending on inflation adjustments.
- No Changes to RMD Age or Capital Gains
- Required Minimum Distribution (RMD) age remains at 73; capital gains treatment is unchanged.
- Charitable Deduction Limits Restored
- Reverts to 60% of AGI for cash contributions to public charities.
Social & Health Program Changes
- Medicaid Work Requirements Introduced
- For non-disabled, working-age adults in states that opt in.
- SNAP (Food Assistance) Tightened
- More strict eligibility documentation and employment requirements.
- Clean Energy Credits Sunset
- EV and solar tax credits are phased out by the end of 2026, unless renewed.
What to Do Next
The law presents multiple planning opportunities—but also introduces complexity. Whether you’re a retiree assessing deductions, a business owner planning capital purchases, or a family thinking ahead on legacy, we’re here to help you navigate the path forward.
Reach out to one of our advisors to explore how the changes in the OBBB could impact your tax strategy, income planning, or estate design 630.219.1695.
This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.