The One Big Beautiful Bill Act (OBBBA)
In July 2025, Congress passed the One Big Beautiful Bill Act (OBBBA) – which, regardless of the goofy name, delivers a healthy mix of permanent and temporary tax benefits for individuals and families.
While the specifics depend on your income, filing status, and overall financial situation, several key changes are worth a look. (And because no one wants to try and read through the entire bill for the useful tasty bits…here’s the Cliff’s-Notes version of the stuff that’s really helpful to most folks.)
Permanent Tax Benefits
Estate & Gift Tax Relief:
Starting in 2026, the lifetime exemption for estate and gift taxes rises to $15 million per person—or $30 million for married couples.
Lower Individual Tax Rates Stay:
The 2017 Tax Cuts and Jobs Act brackets are now made permanent, helping preserve lower marginal rates for many taxpayers.
Higher Standard Deduction:
The expanded deduction is permanent and continues to adjust with inflation. In 2025, it’s $15,750 for single filers and $31,500 for joint filers.
Improved Child Tax Credit:
Beginning in 2025, the Child Tax Credit increases to $2,200 per child, with annual inflation adjustments. The $500 credit for other dependents also remains in place.
More Flexibility for 529 Plans:
529 college savings plans can now cover a wider range of K–12 educational expenses, expanding how families can use their savings.
529-to-ABLE Rollovers:
Funds from a 529 plan can now be rolled over to an ABLE account (for individuals with disabilities) without penalty.
Charitable Deduction for Everyone:
Beginning in 2026, taxpayers who don’t itemize can still deduct up to $1,000 in charitable donations ($2,000 for joint filers).
Student Loan Repayment Assistance:
Employers can permanently provide up to $5,250 per year in tax-free student loan repayment help, starting in 2026.
Temporary Tax Benefits (2025–2028)
Extra Deduction for Seniors:
Taxpayers age 65 and older can claim an additional deduction—up to $6,000 for single filers or $12,000 for married couples, subject to income limits.
Tipped Income Deduction:
Workers in tipped occupations can deduct up to $25,000 of qualified tip income through 2028.
Overtime Pay Deduction:
From 2025–2028, taxpayers can deduct up to $12,500 ($25,000 for joint filers) in qualified overtime pay, with phaseouts based on income.
Auto Loan Interest Deduction:
Buyers of new, U.S.-assembled passenger vehicles between 2025 and 2028 can deduct up to $10,000 in loan interest, depending on income limits – $100,000 Modified Adjusted Gross Income (MAGI) for single filers and $200,000 (MAGI) for married couples filing jointly.
Higher SALT Deduction Cap:
The State and Local Tax (SALT) deduction cap rises to $40,000 through 2029, then returns to $10,000 in 2030.
What This Means for You
The OBBBA creates both immediate and long-term planning opportunities, from auto purchases, to charitable giving and education funding, to estate and income-tax strategies.
As many of you know, we’ve wrapped tax analysis and planning into our practice as most folks would like to keep more of their money for themselves and gift less of it to the government. So, if you’d like to discuss how the changes the OBBBA offers might affect your personal plan, or what can be done to just lower your taxes in general, we’d be happy to set up a review and see if there are ways you can take advantage of those tasty bits.
As always, you can reach us directly at 518-877-6600 or via email at leo@nicoterawealth.com / austin@nicoterawealth.com.
Warmly,
The Nicotera Wealth Management Family
Leo, Austin, Brooke & Olivia
Family-Owned. Family-Focused. Financially Strong.
And please feel free to pass this newsletter along to your closest friends, relatives, and colleagues if you think they would benefit.
If you’d like a 2nd opinion on your retirement plan or investment portfolio, head over to www.NicoteraWealth.com, click on the button that says “See if we’re right for you,” answer the questionnaire, and we’ll reach out to get an introduction call set up in the calendar at a time that’s convenient for you.
Disclosure: This piece is for informational purposes only and contains opinions that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Discussion of any specific strategy is not intended as a guarantee of profit or loss. Past performance is not a guarantee of future results. Objectives mentioned are not guaranteed to be achieved. All performance referenced is historical. All indices are unmanaged and may not be invested in directly. Tactical allocation may involve more frequent buying and selling of assets and will tend to generate higher transaction costs. Investors should consider the tax consequences of moving positions more frequently. All investing involves risk, including loss of principal.
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.