As we approach year end, tax planning should be top of mind. The One Big
Below, we will answer the following questions:
The One Big Beautiful Bill Act (OBBBA) is a 330-page spending bill that was signed by President Trump on July 4, 2025. Within the confines of the budget reconciliation process, the OBBBA introduced quite a few changes — to healthcare, to homeland security, to defense — but also to individual and business taxation.
Before we get into the details of the OBBBA, it’s worth bringing up the Tax Cuts and Jobs Act (TCJA).
President Trump passed the TCJA in his first term. This record-setting tax law introduced many new tax provisions to both individual and business taxes. While the corporate tax law changes were permanent, most of the individual tax law provisions were set to sunset (or expire) at the end of 2025. The OBBBA made nearly all these provisions permanent.
Below is a list of thresholds and limitations that will change in 2025 or 2026 thanks to the OBBBA.
Not only are the tax rates lower, but the tax brackets are broader, meaning that people may fall into lower marginal tax brackets than if the law hadn’t changed. Though the brackets aren’t finalized for the 2026 tax year, it’s estimated that a married couple making $210,000 in 2026 will be in the third tax bracket with their marginal earnings taxed at 22%. If the OBBBA had not been passed, this same couple would have been in the fourth tax bracket with their marginal earnings taxed at 28%.
If the OBBBA had not been passed, the standard deduction would have been cut nearly in half beginning in 2026 when the TCJA provisions expired. In effect, the larger deduction allows more individuals to take the standard deduction rather than itemize, which often (1) reduces their taxable income, and (2) saves them time and effort gathering the information needed to itemize.
Let’s answer a few common tax planning questions that we hear our clients asking now that the OBBBA has made it across the finish line.
Yes, you may want to change your charitable giving strategy in light of the OBBBA. Timing matters here.
The two major changes to charitable contribution deductions kick in in 2026. This means that you have the remainder of the 2025 tax year to contribute under existing tax laws.
If you itemize your deductions, you’ll automatically lose some portion of your charitable contribution deduction in 2026. If you don’t want to see this haircut to the contributions you make that are eligible for deduction, you could consider accelerating your 2026 donations into 2025.
Another common giving strategy when there is a deduction floor like this is to “bunch” multiple years’ worth of deductions into a single tax year. This ensures that your donations get that 0.5% haircut only once.
The opposite plan could make sense for those who don’t itemize. These taxpayers may see more of a benefit by delaying charitable donations to 2026 so that they can get that “free” $1,000 or $2,000 deduction.
Wealthy taxpayers with complex charitable giving strategies will want to reach out to their advisors before the year ends to see if any of their long-term strategies should change.
Now that the $15 million estate tax exemption was made permanent, very few taxpayers will ever be subject to estate tax. In 2023, when the estate tax was $12.92 million per individual, the Tax Policy Center estimated that fewer than 7,000 estate tax returns would ever need to be filed, and that fewer than 4,000 would owe any tax.[1]
Even though you’re unlikely to pay estate tax, estate planning is an essential year-end consideration. Estate taxes are just one piece of the puzzle. You’ll also need to think about:
You can boost your estate’s value with proper income tax planning, too. Your advisor can help optimize your tax position in light of the OBBBA’s changes.
The expanded SALT deduction cap — $40,000 rather than $10,000 — is effective starting this year, in 2025. This means that more of your state and local taxes (like property taxes, state income taxes, etc.) will be deductible on your personal income tax returns. If this allows you to take the full deduction for taxes paid, that’s great! Establishing a workaround becomes less urgent.
However, electing into a Pass-Through Entity Tax (PTET) can still offer meaningful benefits, as the PTET elections allow state taxes to be paid and deducted at the entity level. Meaning, those taxes don’t count against your personal SALT cap. This can preserve the full $40,000 deduction for other state and local taxes — such as property taxes — on your individual return.
The only way that you’ll know if PTETs provide you (and your fellow shareholders/members) with a tax benefit is to walk through the scenario. Depending on—
It’s also wise to think ahead. This $40,000 cap will drop back down to $10,000 after 2029, which means that you’ll likely need to consider a workaround at some point. Use these next four years to figure out what that workaround looks like. For most taxpayers, PTETs are the perfect solution. But PTETs are complex and can take some time to implement. So don’t delay talking to your advisor.
Our Meaden & Moore advisors are here to help you with any year-end planning needs that you might have. Schedule a consultation with us today.
[1] https://taxpolicycenter.org/briefing-book/how-many-people-pay-estate-tax