How the “One Big Beautiful Bill” Could Impact Your Tax and Estate Plan

In May 2025, the House of Representatives passed a sweeping piece of tax legislation dubbed the “One Big Beautiful Bill” (OBBB). As the Senate takes up debate, lawmakers are preparing to amend key provisions. Meanwhile, the bill already introduces major tax changes that directly shape how high-net-worth families, business owners, and U.S. expats can plan their financial and estate strategies.

This post summarizes the most relevant tax provisions and estate planning implications, with executive-style snapshots to keep things skimmable. We’ll update this page with major changes or milestones as the bill moves through Congress.

The One Big Beautiful Bill passed the House in May 2025, now facing Senate negotiation and revisions.

Estate & Gift Tax Exemption Extension

Summary: The bill increases the lifetime estate and gift tax exemption to $15 million per individual (or $30 million per married couple) starting in 2026, with adjustments for inflation thereafter.

What this could mean for you: The current federal estate and gift tax exclusion is $13.61 million per person in 2025. Without Congressional action, that amount will drop to about $7 million per person in 2026. The proposed bill increases the exemption starting in 2026, but until it’s law, planning under existing rules remains crucial. Families with estates approaching or exceeding these thresholds should consider acting before year-end to secure the higher exemption.

Our take: For clients with larger estates, this may be the last best chance to take advantage of today’s historically high exemption amount before it potentially drops in 2026. Consider locking in use of the exemption while it’s still guaranteed—especially if you’ve delayed planning due to uncertainty. Popular structures like IDGTs or SLATs can be effective tools, but the right fit depends on your family, assets, and goals. Explore our gifting and estate tax planning services.

Capital Gains Surtax for Ultra-High Earners

Summary: The bill proposes maintaining current long-term capital gains tax rates for most taxpayers but includes a framework for imposing a surtax on large capital gains transactions—details like thresholds and rates remain under Senate review.

What this could mean for you: If you’re planning to sell a business, exit real estate investments, or realize substantial portfolio gains, this surtax could substantially raise your tax bill. The threshold hasn’t been finalized, but the proposal targets those with multi-million-dollar capital events. Pre-transaction planning is essential to reduce the impact—especially for those considering one-time liquidity events before retirement or emigration.

Our take: Strategic timing of gains matters more than ever. Consider charitable trusts, installment sales, or deferral strategies if you’re planning a liquidity event. Learn more about capital gains deferral options.

Individual & Corporate Tax Rate Stabilization

Summary: The bill makes permanent the individual income tax brackets enacted under the TCJA—retaining the top marginal rate of 37%—and preserves the 21% corporate tax rate.

What this could mean for you: The permanence of the current tax brackets provides a predictable income tax environment, which is beneficial for structuring distributions from closely held businesses or trusts. Maintaining the 21% corporate tax rate allows corporate owners to continue evaluating the benefits of pass-through versus C-corporation structures for tax efficiency.

Our take: The stabilization of these tax rates offers short-term planning clarity for compensation structuring, income harvesting, and entity type selection. However, it’s important to note that the bill is still subject to Senate deliberations, and changes may occur. Therefore, while the current provisions provide a framework for planning, staying informed about legislative developments is crucial.

Alternative Minimum Tax (AMT)

Summary: The bill does not repeal the individual AMT, but it permanently extends the increased exemption amounts and phase-out thresholds originally set by the TCJA.

What this could mean for you: The AMT often acted as a hidden tax on high earners by disallowing certain deductions and forcing recalculation of tax under a separate system. For those exercising ISOs or claiming large state tax deductions, it was a frequent trap. With its repeal, individuals have more flexibility in timing income and deductions without triggering AMT exposure.

Our take: If you’ve had to structure around AMT exposure in the past, this repeal could open new opportunities.

Enhanced Qualified Business Income (QBI) Deduction

Summary: Increases the Section 199A deduction from 20% to 23% for pass-through businesses beginning in 2026. Source

What this could mean for you: This increase boosts after-tax income for qualifying pass-through businesses, particularly in high-income brackets. Owners of S corps, partnerships, or Schedule C businesses may see meaningful savings. However, the complex limitations (such as W-2 wage thresholds and service business exclusions) still apply.

Our take: Consider how your current business structure leverages this deduction—and whether restructuring could enhance your tax savings. Talk to us about business entity structuring.

Bonus Depreciation Restored

Summary: Restores 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025, and before January 1, 2030.

What this could mean for you: This powerful incentive allows immediate expensing of new or used capital assets like equipment, software, and vehicles. It’s especially useful for businesses looking to accelerate deductions or front load expenses ahead of growth or sale. It also pairs well with exit planning, as it can help lower current year income before a capital event.

Our take: Bonus depreciation isn’t just about timing—it’s a powerful tool for reducing taxable income and increasing near-term cash flow. Whether you’re expanding, prepping for a sale, or having a high-income year, front-loading deductions through strategic purchases or cost segregation can significantly boost liquidity and ROI.

International “Revenge Tax” on Foreign Investors (Section 899)

Summary: Authorizes Treasury to impose up to a 20% tax on U.S. investment income received by foreign entities from jurisdictions deemed non-cooperative.

What this could mean for you: This provision targets foreign structures that benefit from U.S. investments while avoiding reciprocal tax enforcement. If you hold U.S. real estate or securities through a non-U.S. company (especially in places like BVI, Cayman, or Luxembourg), this could impact returns or trigger new filing requirements.

Our take: Review U.S.-facing investments held through offshore structures and prepare for Treasury guidance. Talk to us about cross-border planning strategies.

Modified SALT Deduction Cap

Summary: Raises the State and Local Tax (SALT) deduction cap to $40,000 for joint filers, with a phase-out beginning at $500,000 in modified adjusted gross income.

What this could mean for you: This could revive a key deduction for professionals and retirees in high-tax states. While income limitations apply, many dual-income households previously impacted by the $10,000 cap may now find relief. For those near the income threshold, planning around income recognition could become part of year-end tax strategy.

Our take: The increase in the SALT cap offers a welcome opportunity for tax relief, but it’s not automatic. If your income is near the $500,000 phase-out threshold, consider income deferral, retirement plan contributions, or timing of capital gains to stay under the cap. And don’t overlook payment timing—prepaying state taxes before year-end could help maximize your deduction. Strategic coordination with your broader income plan is key.

Other Provisions You Might Be Curious About

While less relevant to core tax planning, these measures may interest you:

• “MAGA Accounts” for Newborns: $1,000 starter accounts officially called Money Accounts for Growth and Advancement (MAGA) for U.S.-born children (2025–2029); parents may contribute up to $5,000/year.
• Car Loan Interest Deduction: Deduct interest on U.S.-assembled vehicle purchases through 2028.
• 529 Plan Enhancements: Expands eligible expenses, including K-12 and homeschool costs.
• Child Tax Credit Increase: Raised from $2,000 to $2,500 per child; new SSN requirement for both parents may limit eligibility in some families.
• Clean Energy Tax Credit Repeal: Solar and EV credits repealed; nuclear credit extended.
• Medicare HSA Rule Change: Allows HSA contributions for those on Medicare Part A with a high-deductible health plan.
• ERC Refund Restrictions: Disallows claims filed after Jan 31, 2024; audit window extended to six years.

Where Things Stand — And What’s Next

The bill passed the House in May 2025 and is now under Senate review. Changes are expected—particularly to the international surtax and child-related provisions.We will update this post as the legislation evolves.

Don’t Wait for Congress to Act

Waiting for Congress to finalize the bill may cost you valuable planning time. Many of these proposed changes create a closing window for action—or open doors that won’t stay open forever. Whether it’s locking in the estate tax exemption, managing capital gains, or optimizing business deductions, your ability to act now could be the difference between proactive planning and missed opportunity. Schedule a complimentary consultation with our tax and estate planning attorneys today.