On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) became law. This new legislation makes some big changes that affect estate planning, business planning, and taxes—especially for business owners, high-net-worth individuals, and their families.
Here’s a quick overview of some of the most important changes and what they could mean for you:
Estate & Gift Tax Exemption Gets a Big, Permanent Boost
Starting January 1, 2026, the federal estate, gift, and generation-skipping transfer tax exemption will increase to $15 million per person (currently $13.99 million), and it will continue to adjust for inflation in future years.
Previously, the higher exemption created by the 2017 Tax Cuts and Jobs Act (TCJA) was set to expire at the end of 2025. Now, thanks to the OBBBA, the exemption not only stays in place—it gets larger and doesn’t sunset.
Why it matters: This is a huge win for families with larger estates. It allows you to transfer more wealth to your heirs free of transfer taxes and gives us more certainty for long-term estate and gift planning.
Temporary Relief on the SALT Deduction Cap
If you live in a high-tax state, you’ll appreciate this one: from 2025 through 2029, the OBBBA raises the cap on state and local tax (SALT) deductions from $10,000 to $40,000 (with a small annual inflation adjustment).
For individuals earning over $250,000 (or $500,000 for couples), that extra $30,000 in deductions phases down until it hits a $10,000 floor. In 2030, the cap reverts back to $10,000.
Why it matters: This could provide short-term tax relief for those in states like New York and Massachusetts, and may also create opportunities to use strategies like the pass-through entity tax (PTET) or even nongrantor trusts to maximize deductions and manage income levels.
New Limits on Charitable Deductions
Starting in 2026, individuals who itemize will only be able to deduct charitable contributions exceeding 0.5% of their adjusted gross income.
If you take the standard deduction, charitable deductions will now be capped at $1,000 for individuals and $2,000 for married couples.
The good news? Cash gifts to certain qualified charities remain deductible up to 60% of AGI (instead of dropping back to 50% as previously scheduled).
Why it matters: If you’re a regular donor, we may want to talk about timing contributions—whether accelerating or delaying gifts makes the most sense for your tax situation.
Better Benefits for Qualified Small Business Stock (QSBS)
The OBBBA also expands who can benefit from the Qualified Small Business Stock (QSBS) exclusion by:
- Adding a tiered gain exclusion for stock sold before hitting the five-year mark (50% if held 3 years, 75% if 4 years, and 100% if 5+ years).
- Raising the gain exclusion cap from $10 million to $15 million (or 10x basis, whichever is greater).
- Increasing the “small business” asset limit from $50 million to $75 million.
These changes apply to QSBS issued after July 4, 2025; earlier shares follow the old rules.
Why it matters: Founders and early-stage investors will see bigger potential tax breaks—even if they sell stock earlier than five years.
Bottom Line
The One Big Beautiful Bill Act delivers a mix of taxpayer-friendly updates: a larger and permanent estate tax exemption, a temporary SALT deduction boost, and enhanced QSBS benefits. It also brings some much-needed clarity for long-term planning.
If you’re wondering how these changes might affect your estate plan, charitable giving, or business exit strategy, now is a great time to revisit your planning.
Let’s talk about what this means for you and explore strategies that make the most of these opportunities.
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