President Trump has officially signed the One Big Beautiful Bill Act into law, delivering the most comprehensive tax reform we’ve seen in years.

According to government analysis, this legislation provides over $600 billion in new tax relief, with significant proportional benefits for middle-class families. But here’s the critical point: benefits don’t happen automatically—they require proactive planning.

Watch our video summary of The One Big Beautiful Bill Act or see below to learn the key provisions and how they may affect you:

 

New $6,000 Senior Tax Deduction

 

If you’re 65 or older, this could be one of the most valuable changes in the entire bill. You may now qualify for a new tax deduction of $6,000 per person from 2025 through 2028. For married couples where both spouses are 65+, that represents $12,000 in additional deductions. This change could potentially save qualifying seniors between $1,440 to $2,880 annually, depending on your tax bracket.

Benefits are available for individual filers with incomes up to $75,000 and married couples filing jointly with incomes up to $150,000, with phase-outs for higher income levels.

 

SALT Deduction Cap Increase

 

For homeowners in high-tax states, this change could provide substantial relief. The state and local tax (SALT) deduction cap increases from $10,000 to $40,000 for the next five years, available for households with income under $500,000.

This change offers meaningful tax reduction opportunities for homeowners with significant property taxes, residents of high-tax states like New York, New Jersey, California, and Connecticut, and families with substantial state income tax obligations.

Business Tax Advantages

 

Business owners have several reasons to celebrate with these permanent changes. The Section 199A deduction for qualified business income becomes permanent. If you own a pass-through entity, business, or partnership, you may count on that 20% deduction for years to come. This stability changes how we approach structuring your business interests, though specific phase-out rules and limitations require careful planning.

Advanced Depreciation Benefits

  • 100% bonus depreciation becomes permanent, allowing immediate full deductions for equipment purchases, which may dramatically improve cash flow and reduce the current year’s taxes
  • Research and development costs can again be immediately deducted rather than spread over five years, creating valuable tax savings for innovation-focused businesses

Manufacturing and Investment Incentives

  • Qualified opportunity zone investments receive extensions and improvements, though optimal benefit windows have specific timing requirements
  • Section 1202 qualified small business stock receives additional benefits, allowing exclusion of up to $15 million in capital gains from taxation when selling qualifying investments

Estate Tax Exemption Increase

 

Families focused on generational wealth transfer now have unprecedented planning opportunities. The estate tax exemption increases to $15 million per individual ($30 million for married couples) and becomes permanent. This update provides certainty for legacy planning and wealth transfer strategies, allowing families to plan their futures with confidence.

Family and Worker Tax Benefits

 

Working families and service industry employees gain significant new advantages. The child tax credit increases to $2,200 per qualifying child and becomes permanent, providing more predictable benefits for family financial planning.

Worker Tax Relief

The legislation includes several worker-focused tax benefits:

  • No tax on tips: Workers in tip-receiving industries may exclude up to $25,000 in tips from federal taxation
  • No tax on overtime: Overtime pay up to $12,500 may be excluded from federal taxes
  • Made in America auto loan interest: Up to $10,000 in interest on American-made car loans becomes tax-deductible

Time-Sensitive Charitable and Energy Provisions

  • New Charitable Giving Rules: Enhanced charitable giving rules that provide additional deduction opportunities, though these enhancements have specific requirements that need immediate attention to maximize their potential value in 2025.
  • Energy Tax Credit Phase-Outs: Energy tax credits, such as for electric vehicles, are being phased out with specific deadlines. This means time-sensitive planning opportunities for those considering renewable energy investments or home energy improvements before the credits expire.

Healthcare and Savings Program Expansions

 

Why Professional Planning Is Essential

According to government analysis, the typical family may see up to $10,900 in additional take-home pay under this legislation. Households earning less than $100,000 could potentially receive an average 12% tax cut. However, many benefits have income phase-outs and timing considerations that may affect their value. The new charitable giving rules, improved adoption credits, and energy tax credit phases all have specific requirements that need attention to maximize their potential value in 2025.

Your Next Step

Your financial future depends not just on what you earn, but on what you keep. Don’t wait until year-end when options may be limited.

Find one of our advisors to schedule your comprehensive tax strategy review. We’ll analyze your specific situation and develop a customized plan to evaluate your eligibility, optimize your long-term strategy, and coordinate all aspects of your financial plan.

 

Disclosure: Prosperity Capital Advisors prioritizes client interests with a comprehensive planning approach that integrates tax strategies with long-term wealth building. Our team helps clients navigate complex tax law changes while avoiding common pitfalls such as reactive planning and year-end scrambling. See our full list of advisors by clicking here.