Curated by: Rubric Advisors
Tax Planning
The One Big Beautiful Bill Act
The One Big Beautiful Bill Act made key TCJA provisions permanent, including individual tax rates, the QBI deduction, and estate tax exemptions, while modifying SALT caps and phasing out certain clean energy credits.
The One Big Beautiful Bill Act
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Individual Tax Rate Changes
- Tax Cuts and Jobs Act individual rates made permanent (top rate stays at 37%)
- Seven bracket structure maintained: 10%, 12%, 22%, 24%, 32%, 35%, 37%
- Without this law, rates would have reverted to higher pre-2017 levels in 2026
- All bracket thresholds continue to be indexed annually for inflation
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Individual Tax Rate Changes
- Tax Cuts and Jobs Act individual rates made permanent (top rate stays at 37%)
- Seven bracket structure maintained: 10%, 12%, 22%, 24%, 32%, 35%, 37%
- Without this law, rates would have reverted to higher pre-2017 levels in 2026
- All bracket thresholds continue to be indexed annually for inflation
SALT Deduction and Standard Deduction
- State and local tax (SALT) deduction cap raised from $10,000 to $40,000
- SALT cap phases out for higher-income taxpayers above certain thresholds
- Standard deduction amounts remain elevated and continue inflation indexing
- Taxpayers in high-tax states see partial relief but not full pre-TCJA deductibility
Estate and Gift Tax Exemption
- Elevated TCJA lifetime exemption made permanent ($13.99M per person in 2025)
- Married couples can shelter up to $27.98M combined using portability
- Exemption continues to be indexed for inflation in future years
- Removes the 2026 sunset that would have cut exemption roughly in half
Business Owner Provisions
- 20% qualified business income (QBI) deduction made permanent for pass-throughs
- 100% bonus depreciation restored for qualified capital investment purchases
- Opportunity Zone incentives extended for qualified opportunity fund investments
- Pass-through entity tax (PTET) workaround preserved for state tax deductions
Clean Energy Credit Changes
- Several clean energy tax credits face accelerated phaseouts or elimination
- Electric vehicle credit eligibility narrowed with stricter sourcing requirements
- Home energy efficiency credits and solar credits begin phasing down
- Business energy incentives see modified timelines, review project deadlines carefully
Key Takeaways
- Permanent rates and exemptions provide more certainty for long-term planning
- Review estate plan to take advantage of confirmed high exemption levels
- Accelerate clean energy projects that may lose credit eligibility soon
- Consult your advisor to model the combined impact of these changes on your situation
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