The One Big Beautiful Bill Act: Unlocking Tax-Savvy Opportunities for Your Clients

The One Big Beautiful Bill Act: Unlocking Tax-Savvy Opportunities for Your Clients

9.16.2025

By Stacy Francis

Over the Fourth of July weekend, while Americans were soaking up the sun and firing up grills, lawmakers in Washington were busy changing the financial landscape. The “Big Beautiful Bill” narrowly made it through Congress and was signed into law. It brings a whole host of changes aimed at tax relief, business growth, and immigration enforcement, while stirring heated debate over its costs, priorities, and ethical implications.

The One Big Beautiful Bill Act presents lawyers with a timely opportunity to guide clients through tax-smart decisions that can significantly impact their financial outcomes. Whether your clients are retirees navigating Social Security, high-net-worth individuals dividing significant assets, or families trying to support and provide for children while managing limited income during divorce or after the death of a parent, the new law offers a rare window for proactive planning.

This article highlights some of the most significant and impactful provisions; however, please note that the bill is a 1,200-page package, and not every detail can be captured here. Still, having a solid grasp of the key changes will prepare you to respond when clients inevitably call with questions and help you deliver timely, informed advice that positions them for better outcomes.

What’s in the Bill?

Here’s a plain-English summary of what the bill is. The new law effectively serves as an extension of the Tax Cuts and Jobs Act of 2017, which was slated to expire at the end of 2025. The heart of the legislation passed includes:

• Tax brackets locked in place: The new law hits the pause button on rising tax rates, locking in today’s lower brackets – 10%, 12%, 22%, 24%, 32%, 35%, and 37% – which were set to rise after 2025 without legislative action.
• Extra tax break for seniors (but just for a while): From 2025 through 2028, Americans age 65 and up can snag an additional deduction, up to $6,000 per person. It’s a nice bonus for retirees, though it gradually phases out for higher earners and vanishes entirely once income hits $175,000 for singles or $250,000 for couples.
• Stackable with the existing 65+ deduction: This new temporary deduction doesn’t replace the current $2,000 bump for seniors or those who are blind; it stacks on top of it. This offers even more potential savings during those key retirement years.

Planning Opportunities

When it comes to taxes, timing is everything. By strategically choosing when to recognize income or claim deductions, clients can stay in lower tax brackets and qualify for valuable tax breaks, like the new $6,000 senior deduction. For instance, if a client is close to the income threshold where that deduction phases out, shifting income to a different year or accelerating deductible expenses could help them keep more money in their pocket. It’s a smart way to make the tax code work for them, not against them.

SALT Deduction Raised

• A SALT shake-up for high-tax states: Families in states like New York and California just got some breathing room. The cap on state and local tax deductions, stuck at $10,000 since 2018, has been temporarily lifted to $40,000. That means homeowners and taxpayers who itemize can now deduct a much larger chunk of their property, income, or sales taxes.
• But watch the fine print: The extra $30,000 in deductions starts shrinking once your income tops $500,000 and vanishes completely at $600,000. For top earners, the cap quietly slips back to $10,000.

Planning Opportunities

For clients approaching the $500,000 income threshold, thoughtful planning can unlock thousands in additional tax deductions. The trick? Timing and structure. By shifting income to a different year or accelerating deductions, high earners can slip under the SALT deduction phaseout and claim the full $40,000. Non-grantor trusts offer another savvy move. These vehicles are taxed separately, so income placed there does not count against the individual’s limit.

A Generational Gift: How the OBBBA Supercharges Your Estate and Charitable Plans

• A bigger legacy, less to the IRS: If you’re thinking about what kind of legacy you’ll leave behind, the new legislation handed you a robust toolkit. For starters, it dramatically raises the bar on what you can pass along to your loved ones, tax-free. Each person now receives a lifetime exemption of $15 million from estate and gift taxes, and this threshold is expected to rise with inflation. Translation? You can transfer more of your wealth to family without Uncle Sam taking a bite.
• And there’s more good news for couples: The law extends the portability rules. That means if your spouse passes away and doesn’t use their full exemption, you can inherit it for use.

Planning Opportunities

Families with significant assets now have a golden window to make tax-free transfers. Starting in 2026, married couples can gift up to $30 million to children or other heirs without triggering estate taxes. For couples navigating a divorce, this opens the door to creative settlement strategies – think lifetime gifts that lock in these elevated exemptions. If gifting is on the table, 2026 is the time to act.

Heads-Up for Charitable Givers: A New Rule Is Coming in 2026

Starting in 2026, a quiet but important change could affect how much of your charitable giving you can write off on your taxes.

• What’s changing: A new rule says you can only deduct charitable donations that exceed 0.5% of your income (adjusted gross income). For someone earning $1 million a year, that means the first $5,000 of donations won’t count. This “deduction floor” kicks in before any of the usual percentage limits are applied.
• What this means for you: Timing is everything: Donations made in 2025 aren’t subject to the new floor.
• Focused giving helps: Cash gifts to public charities remain the most deduction-friendly.
• Not feeling ultra-wealthy? There’s still a perk for everyday givers. You can take a charitable deduction even if you don’t itemize. Singles can write off up to $1,000, and couples can claim $2,000.

Planning Opportunities

Thinking about a big donation? Do it before Dec. 31. Avoid losing out on charitable deductions by planning ahead. Making a large donation to a donor advised fund will allow you to give big and take a full charitable deduction in 2025. What is even better is that your dollars in the fund can be donated in future years.

Social Security Still Taxable for Many Retirees – Despite the Hype

• Don’t pop the champagne just yet: Social Security checks are still very much on the IRS’s radar. After the bill passed, confusion spread when the Social Security Administration suggested nearly 90% of beneficiaries wouldn’t owe taxes on their benefits. But that interpretation doesn’t tell the whole story.^[1]
• Here’s the reality: While the new law includes a temporary $6,000 deduction for those 65 and older, it doesn’t specifically exempt Social Security income from taxation. That deduction reduces your overall taxable income, but it doesn’t prioritize Social Security. If you also have income from retirement accounts, pensions, investments, or rental properties, you could still end up paying taxes on part of your benefits.
• The bottom line: Unless your income is relatively low, you’ll likely still owe taxes on a portion of your Social Security.

529 Plans and ABLE Accounts Just Got Smarter; Meet the New Trump Account

• 529 plans get a boost (starting 2026): These education savings plans just became more versatile. In addition to covering college costs, 529 funds can now be used for job-focused education, like professional licenses, certifications, and career training programs.
• Bigger K–12 benefits: Families can now use up to $20,000 (double the previous limit) from 529 plans for tuition and qualifying expenses at K–12 public, private, or religious schools to help parents looking to make their education dollars go further.
• Introducing Trump accounts (coming July 2026): Families will be able to open new retirement-style accounts for their children under the age of 18, with an annual contribution limit of up to $5,000 per child. Money will grow tax-deferred, with income taxes due upon withdrawal depending on the timing and use of the funds.
• Bonus for new babies: If your child is born between 2025 and 2028, the government will sweeten the deal with a $1,000 bonus contribution to their Trump account.

Planning Opportunities

The government will give you $1,000 if you have a child in 2025 or in the next several years. That’s essentially free money to jumpstart their financial future. However, Trump accounts make the most sense for parents who have maxed out 529 plan accounts and want to get a super early start on their child’s retirement nest egg. Converting the account into a Roth IRA at age 18 could offer even more tax-savvy benefits, giving your child decades of tax-free growth.

ABLE Accounts

• ABLE accounts just got an upgrade: The new law permanently locks in higher contribution limits for ABLE accounts – tax-advantaged savings accounts for people with disabilities – and adds extra inflation adjustments to keep them growing over time, ensuring families can save more, year after year.
• 529 funds, now more flexible: Families can now roll over unused money from 529 college savings plans into ABLE accounts, tax-free, making it easier to repurpose education savings for long-term disability support.

Child Tax Credit: A Bigger, Permanent Boost for Families

• Good news for parents: The Child Tax Credit is growing. Parents can lock in the credit at $2,200 per child starting in 2025, avoiding the planned drop back to $1,000. Even better? It will now rise automatically with inflation beginning in 2026. This is a first in the credit’s nearly 30-year history.
• Phase-outs still apply: The credit shrinks for incomes over $200,000 (single/head of household) or $400,000 (joint).

Congress Tightens the Purse Strings on Student Loans

• Student loan caps are coming: A new federal proposal would limit total federal student loan borrowing to $257,500 per person. This ceiling could significantly impact how students fund their higher education.
• A direct hit to aspiring attorneys: Law students will be significantly affected. This cap also affects all students, including those pursuing degrees in medicine, dentistry, veterinary medicine, and even advanced degrees in education and STEM fields.
• The impact isn’t theoretical: According to the most recent data from the 2019-20 National Postsecondary Student Aid Study, a surprising number of students were already borrowing more than what the new federal loan cap would allow.^[2]
  • 2.7% of parents of undergraduate students.
  • 4.8% of students in master’s degree programs.
  • 6.0% of students in doctoral degree programs.
  • 9.3% of those in law programs (LLB or JD).
  • 12.7% of those in pharmacy programs (PharmD).
  • 27.5% of professional school students in MD programs.
  • 59.9% of those in dentistry programs (DDS, DMD).
• Private loans fill the gap, but at a cost: Anything beyond the cap would have to be covered by private student loans, which often require strong credit, co-signers, and come with fewer borrower protections, making them riskier and less accessible for many.

New Tax Breaks You Might Actually Use

The latest tax law delivers some surprising wins for everyday earners, especially if you run your own business, earn tips, or work overtime. Here’s a breakdown of what’s new:

• 20% deduction for business owners is here to stay: If you’re a sole proprietor or own a pass-through business (like an LLC or S-Corp), the valuable 20% qualified business income (QBI) deduction continues to apply.
• Tips are now deductible: If your income is under $150,000 ($300,000 for joint filers), you can deduct up to $25,000 in tips each year. The deduction gradually phases out above those income thresholds, but it’s still a meaningful benefit for most service professionals.
• Overtime deduction: Putting in extra hours? If your income is within the same $150,000/$300,000 limits, you can deduct up to $12,500 of your overtime pay on your taxes, providing relief for those with demanding schedules.
• Car loan interest write-off: If you’re financing a car and make under $100,000 ($200,000 if married), you can deduct up to $10,000 in interest on your loan for a new passenger vehicle that had its final assembly in the United States.[3]

The One Big Beautiful Bill Act delivers sweeping changes that open powerful planning opportunities for individuals and families across the income spectrum. The new deductions for seniors, enhanced education and disability savings tools, as well as expanded estate tax exemptions come with much complexity. It is key to revisiting financial strategies optimizing for the road ahead.

Many of these provisions are brand new and do not yet have finalized regulations or detailed guidance from the IRS. As always, we’ll be looking closely for further clarification in the coming months to help you and your clients make the most informed and strategic decisions. Stay tuned – this is just the beginning.

Stacy Francis is the president and CEO of Francis Financial, a wealth management and financial planning firm dedicated to helping women through transitions such as divorce and widowhood. This article appears in a forthcoming issue of Family Law Review, the publication of NYSBA’s Family Law Section. For more information, please see nysba.org/family.

Endnotes

[1] Tara Siegel Barnard, Social Security Email Says Trump’s Policy Bill Ends Taxes on Benefits. Does It? The New York Times (July 26, 2025), https://www.nytimes.com/2025/07/06/your-money/social-security-tax.html.

[2] The National Postsecondary Student Aid Study (NPSAS), https://nces.etHE d.gov/surveys/npsas.

[3] Fact Sheet: One, Big, Beautiful Bill Act: Tax Deductions for Working Americans and Seniors,  Internal Revenue Service, Aug. 25, 2025, https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors.