The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, with much fanfare—and yes, the name sounds like something dreamed up in a focus group. But beyond the marketing, this bill brings real, sweeping changes to the tax code. These updates affect how you earn, give, invest, and leave a legacy.
At 9M Investments, we’ve already incorporated the law into every client’s financial plan. Here’s a breakdown of the major provisions and how they may affect your strategy moving forward.
Tax Rates Locked In
The OBBBA permanently maintains the Tax Cuts and Jobs Act (TCJA) income tax brackets:
10%, 12%, 22%, 24%, 32%, 35%, 37%.
This offers welcome clarity for long-term planning.
Standard Deduction and Senior Tax Relief
For the 2025 tax year, the standard deduction increases to:
- $15,750 for single filers
- $31,500 for married filing jointly
- $23,625 for heads of household
Additionally, taxpayers aged 65 or older receive a $6,000 deduction from 2025 through 2028. This phases out beginning at $75,000 (single) and $150,000 (joint), fully disappearing at $175,000 and $250,000 respectively. Notably, it applies whether you itemize or take the standard deduction.
Charitable Deduction for Non-Itemizers (2026 Onward)
Starting in 2026, non-itemizers can deduct up to:
- $1,000 (single)
- $2,000 (married filing jointly)
This is a small but meaningful win for everyday donors who don’t itemize but still give.
SALT Deduction Expansion (Then Contraction)
The State and Local Tax (SALT) deduction gets a temporary boost:
- 2025: Cap increases to $40,000
- 2026: Cap rises slightly to $40,400
- 2027–2029: Annual 1% increases
- 2030: Reverts to $10,000
High-income earners ($500,000+ AGI) will see a phase-down of the SALT cap by 30% over the next few years. This erosion stops once the deduction hits the $10,000 floor.
QBI Deduction: Permanently Extended and Expanded
The 20% Qualified Business Income (QBI) deduction is now permanent.
New income thresholds:
- $75,000 for individuals
- $150,000 for joint filers
In addition, taxpayers with at least $1,000 of QBI now receive a minimum $400 deduction—automatically inflation-adjusted each year. This supports small business owners and side hustlers alike.
Child Tax Credit Bumps Up
The Child Tax Credit increases by $200, bringing it to $2,200 per child beginning in 2025. This amount will be adjusted annually for inflation starting in 2026.
Estate and Gift Tax Exemption Doubled
Starting in 2026, the estate and gift tax exemption rises to:
- $15 million per individual
- $30 million per couple
This will be adjusted for inflation in future years. For high-net-worth families, this creates a substantial window for legacy and gifting strategies.
AMT Becomes a Bigger Concern
The Alternative Minimum Tax (AMT) now hits sooner and harder:
- Exemption phaseout starts at $500,000 (single) and $1 million (joint)
- The phaseout rate increases from 25% to 50% of income above the threshold
More upper-middle earners may now fall into AMT territory unless their planning is adjusted accordingly.
Itemized Deductions and the End of Pease
The Pease limitation, which gradually reduced itemized deductions at higher incomes, is permanently repealed.
However, starting in 2026, taxpayers in the 37% tax bracket face a new rule:
Itemized deductions are reduced by 2/37 of the lesser of:
- Total itemized deductions, or
- The amount by which taxable income exceeds the 37% bracket threshold
This creates a more targeted hit to deductions for high earners.
What This Means for Your Plan
The One Big Beautiful Bill Act introduces a mix of tax relief, deduction limits, and expanded planning opportunities. For many investors, this is a moment to:
- Revisit charitable giving strategies
- Optimize business income structures
- Capitalize on gifting and estate opportunities
- Adjust deduction timing and AMT exposure
All of these variables have already been reflected in your financial plan. But if you’d like to go deeper, evaluate new opportunities, or coordinate with your CPA, now is a great time.
Tax law may be messy. Your financial plan shouldn’t be.
Let’s schedule time to talk about how these updates shape your next best move.