The “One Big Beautiful Bill Act,” (OBBBA) signed into law in July 2025, contains a wide array of tax provisions impacting individuals, businesses, and international tax policy.  While the legislation touches on numerous areas, this summary focuses specifically on the provisions we believe are most relevant to our individual clients.

It’s worth noting that the legislation makes “permanent” a number of provisions originally enacted under the 2017 Tax Cuts and Jobs Act (TCJA) that were set to expire after 2025. While no legislative change is truly permanent (Congress can always amend the law in the future) these provisions have no built-in sunset and will remain in effect unless actively repealed; this stands in contrast to other elements of the bill that do include explicit expiration dates and will require further legislative action to be extended.  As always, we will continue to monitor implementation guidance and provide updates as needed.

One other note regarding some of the new ideas in the OBBBA – although they were included in the final legislation, their practical implementation will depend on further guidance from the IRS. These provisions must go through the regulatory and administrative process, including potential rulemaking and official notices, before we know exactly how they will be applied in practice.

Unless otherwise indicated, the changes below begin for tax years after December 31, 2025 (that is, starting in 2026).  “Permanent” changes are effective immediately, as they are extending the status quo.

Estate & Gift Tax provisions:

• Permanently increase the estate and lifetime gift tax exemption to an inflation-indexed $15 million for single filers and $30 million for joint filers beginning in 2026.

Income Tax provisions:

• Permanently extend the lower tax rates and brackets originally set to expire, and apply an additional year of inflation adjustment to the 10%, 12%, and 22% brackets.
• Permanently increase the standard deduction, beginning in 2025 at $31,500 for joint filers, $23,625 for heads of household, and $15,750 for all other filers, with inflation adjustments in subsequent years.
• Create a temporary $6,000 deduction for taxpayers over 65, available to both itemizers and non-itemizers, with a phaseout beginning at a modified adjusted gross income of $75,000 (single) or $150,000 (joint). This deduction applies for tax years 2025 through 2028.
• Reinstate 100% first-year bonus depreciation and increase the Section 179 expensing limit to $2.5 million. Also introduces a 100% depreciation allowance for qualifying commercial real property. This applies to assets placed in service after January 19, 2025.
• Make the Section 199A Qualified Business Income (QBI) deduction permanent, maintaining the 20% deduction rate for eligible pass-through business income, and increase the phaseout by $50,000 (single) or $100,000 (joint).
• Make the elimination of the personal exemption permanent.
• Make the expanded Child Tax Credit permanent, increasing the maximum to $2,200 starting in 2026, indexed for inflation thereafter.
• Permanently set the home mortgage interest deduction cap at $750,000 of principal debt.
• Temporarily raise the cap on the SALT deduction to $40,000 in 2025, with a 1% annual increase through 2029; a phaseout applies for taxpayers with income over $500,000. The cap reverts to $10,000 starting in 2030.
• Preserves SALT workarounds (PTE), retaining full deductibility of state and local taxes paid through pass-through entities.
• Make permanent several itemized deduction limitations, including the restriction on personal casualty losses, and the repeal of most miscellaneous (2%) itemized deductions (excluding educator expenses)
• Permanently increase the AMT exemption and index it for inflation but revert the AMT phaseout thresholds to 2018 levels ($500,000 for single filers and $1 million for joint filers) and raise the phaseout rate.
• Create a permanent above-the-line charitable contribution deduction of up to $1,000 (single) and $2,000 (joint), starting in 2026.
• Introduce a 0.5% floor on itemized charitable deductions, requiring contributions to exceed that threshold to be deductible, starting in 2026.
• Repeals several individual-focused energy tax credits from the Inflation Reduction Act: the Clean Vehicle Credit and the Previously Owned Clean Vehicle Credit are eliminated for vehicles acquired after September 30, 2025, and both the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit are repealed for property placed in service or expenditures made after December 31, 2025.
• Temporarily allow a deduction of up to $25,000 in tip income for workers in traditionally tipped industries for tax years 2025 through 2028; phases out at a rate of 10% above AGI of $150,000 ($300,000 for joint filers).
• Temporarily allow a deduction for the premium portion of overtime pay—up to $12,500 for individuals and $25,000 for joint filers—for both itemizers and non-itemizers from 2025 through 2028; subject to a 10% phaseout above $150,000 ($300,000 for joint filers).
• Temporarily make interest on auto loans deductible for both itemizers and non-itemizers for new vehicles assembled in the U.S., up to $10,000, from 2025 through 2028; phases out at a 20% rate for incomes over $100,000 (single) or $200,000 (joint).
• Increase the annual limit for employer-provided Dependent Care Assistance Programs from $5,000 to $7,500 for single filers and married couples filing jointly, and to $3,750 for those married filing separately, starting in 2026.
• Limit the deductibility of gambling losses to 90% of losses, not to exceed total winnings, a change from the previous rule that allowed 100% of losses to be deducted (to the extent of gambling winnings). This takes effect starting in 2026.

529 Plan / Child Savings provisions:

• Expand 529 plan benefits for K–12 education by increasing the annual federal withdrawal limit from $10,000 to $20,000 and broadening the definition of “qualified education expenses” to include non-tuition costs such as curriculum materials, standardized test fees, books, dual-enrollment course fees, online learning tools, tutoring, and specialized support for students with disabilities, starting in 2026.
• Expand qualified higher education expenses for 529 plan withdrawals to include a broader range of workforce development, job training, and continuing education programs. Eligible expenses now cover tuition, fees, books, supplies, and exam costs for industry-recognized certifications or to maintain professional credentials, such as CFP accreditation. This provision is effective immediately upon enactment.
• Create a new tax-deferred investment vehicle called the “Trump Savings Account,” designed to help families build long-term savings for children. Parents can contribute up to $5,000 per year per child (indexed for inflation starting in 2027) until the child turns 18. While similar in some ways to IRAs and 529 plans, Trump Accounts have no earned income requirement, grow tax-free, and allow tax-favored distributions at long-term capital gains rates. Funds must be invested in a low-cost stock index fund and cannot be accessed before age 18. This provision is effective immediately.
• Establish a $1,000 seed contribution from the U.S. Treasury for each child born between January 1, 2025, and December 31, 2028, to be deposited into a newly created Trump Savings Account. There are no income limitations; eligibility requires that the child is a U.S. citizen with a valid Social Security number, and at least one parent must also have a valid Social Security number.

This information is distributed for educational purposes only, and it is not to be construed as an offer, solicitation, recommendation, or endorsement. Krilogy® does not provide tax and legal advice. Krilogy® is affiliated with Krilogy Tax Services, LLC. Krilogy® Tax Services provides tax planning and preparation services for an additional cost to Krilogy® clients. You should consult your attorney or qualified tax advisor regarding your situation.