Wealth Insights

How to navigate 'One Big Beautiful Bill' tax law changes

We present opportunities to consider for the big picture of your finances.

Signed into law on July 4, 2025, the “One Big Beautiful Bill Act” (OBBBA) extends provisions in the 2017 Tax Cuts and Jobs Act and makes many other changes. Here are a few ways it could impact your finances.

If you give to charity:

The law raises the standard deduction and introduces a permanent charitable deduction for non-itemizers, capped at $1,000 for individuals and $2,000 for couples starting in 2026.

For itemizers, new rules require annual charitable giving to exceed 0.5% of adjusted gross income (AGI) to qualify for a deduction. For example, someone with a $100,000 AGI must donate more than $500 before deductions apply. To maximize deductions before the 2026 changes, high-income earners might consider front-loading donations in 2025. Consolidating multiple years’ worth of donations into a single tax year, also known as “bunching,” can help meet the O.5% AGI floor in future years.

If your estate is worth $15 million or more:

The law increases the estate tax exemption to $15 million starting in 2026, with adjustments each year for inflation. Before the new bill, the level was set to decrease to $7 million. Consider implementing planning strategies in 2026 to utilize your exemption and reduce your future taxable estate.

If you’re age 65 or older:

You can deduct up to $6,000 from taxable income if you make $75,000 or less, or $150,000 or less for married couples. That’s starting with your next tax filing and running through the 2028 tax year.

If you’re a parent:

In 2026, the law increases the child tax credit from $2,000 to $2,200 and adjusts it annually for inflation. It also introduces savings accounts for minors known as “Trump Accounts.” Americans born between 2025 and 2028 will be provided a one-time $1,000 government investment in their account. People can contribute up to $5,000 per year in the tax-deferred account for children up to age 18. Withdrawals from a Trump Account will be restricted until the beneficiary reaches 18. After that point, the account will operate similarly to a Traditional IRA, with early withdrawals permitted penalty-free for education costs, starting a business or buying a first home. Additionally, the legislation places new limits on Parent Plus student loans, capping borrowing at $65,000 per student overall, and $20,000 per student per year.

If you live in a high-tax state:

The new law raises the maximum state and local tax (SALT) deduction from $10,000 to $40,000 starting in 2025. This cap will increase by 1% annually through 2029, after which it returns to the original $10,000 limit in 2030. However, for individuals earning over $500,000, the $40,000 deduction begins to phase down at a rate of 30%, reducing the benefit as income rises.

If you earn overtime pay:

The bill adds a tax deduction of up to $12,500 for individuals and $25,000 for couples for overtime pay from 2025 to 2028. There are deduction phase outs for those earning more than $150,000 ($300,000 for married couples).

If you receive tips as income:

There is now a tax deduction of up to $25,000 for income from tips for tax years 2025 to 2028. There are deduction phase outs for those earning more than $150,000 ($300,000 for married couples).

If you want to do a Roth conversion:

Several new tax benefits may be reduced or lost if a taxpayer’s income exceeds certain thresholds, making planning strategies like Roth conversions trickier. This includes the $6,000 senior tax credit, the expanded SALT deduction, and deductions related to tips and overtime. By strategically deferring compensation, you may be able to lower your taxable income and maintain eligibility for certain tax benefits.

If you’re buying a car soon:

You can deduct up to $10,000 in auto loan interest from your taxable income for U.S.-made vehicles for tax years 2025 to 2028. Phase-outs begin when income exceeds $100,000 ($200,000 for married couples).

For more about tax law changes, read our guide, “Wealth Planning Perspective: The One Big Beautiful Bill Act,” which includes impacts for business owners.

The “One Big Beautiful Bill Act” brings significant changes to charitable giving, estate planning, senior benefits, family support, and income-based deductions. With many provisions starting in 2025 and 2026, now is the time to revisit your financial strategy. “It’s essential to talk with your advisor about strategic planning to maximize benefits,” says Maya Brill, Senior Wealth Strategist for Regions Private Wealth Management.

Talk to your Regions Wealth Advisor about:

1. How to make the most of your resources through tax-efficient financial planning.
2. Coordinating a review of your estate planning.

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