On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law. Nicknamed the OBBB or OBBBA, it preserves many key elements of the 2017 Tax Cuts and Jobs Act (TCJA). It also introduces a few new policies.

Are you looking at your 2024 tax return and wondering what might be changing for 2025? The good news: Not much right away. But a few key O-tripple-B updates could open new planning opportunities, especially for those thinking ahead. 

As an FPFoCo client, I’ll break down the tax and other changes most likely to impact you. While I won’t cover every circumstance here, not to worry. If you plan to work with Jason on a tax projection this year, our tax planning software has already accounted for OBBB implications. So your personalized tax projection will, too!

One Big Beautiful Bill Tax Cuts: Lower Tax Rates Are Here to Stay — and so Are Planning Opportunities

You may know or have heard recently that the low federal income tax rates from the TCJA were originally set to expire at the end of 2025. Under the OBBB, those rates are now permanent. That means …

• more opportunities to accelerate income in low-tax years,
• more flexibility for Roth conversions, and
• the potential for better timing when realizing capital gains on concentrated stock positions.

In short, the next few years may be a sweet spot for proactive tax planning.

Standard Deduction Boost — and a Win for the Charitably Inclined

Under the TCJA, which nearly doubled the previous standard deduction, the 2025 standard deduction was slated to be $15,000 for individuals and $22,500 for married couples filing jointly. With the passage of the OBBA, those numbers are up. The standard deduction is now a permanent fixture that will continue to rise with inflation. The new 2025 standard deduction is …

• $15,750 for single filers, and
• $31,500 for those married filing jointly.

But here’s the exciting part for those who don’t itemize: The OBBB adds a new “above-the-line” charitable deduction — $1,000 for individuals and $2,000 for joint filers. That means, even if you take the standard deduction, you can still receive a tax benefit for giving to qualified charities.

Seniors Get a Little Extra — For Now

Taxpayers age 65 and older will receive an additional $6,000 standard deduction — but only temporarily, through 2028. There’s also a phaseout based on modified adjusted gross income (MAGI).

• For single filers, the phaseout begins at $75,000 MAGI.
• For married couples filing jointly, the phaseout begins at $150,000 MAGI.

This opens up the door to more opportunities for Roth conversions for retirees in the years prior to claiming Social Security.

Increased State-Level Deductions

A focal point of the O-tripple-B was the State and Local Tax (SALT) deduction. Previously capped at $10,000, it limited the amount of SALT, mortgage interest, and charitable contributions filers could deduct. Beginning in 2025, the SALT deduction is temporarily increased to $40,000. While it’s set to go back to the $10,000 mark in 2030, it’ll increase by 1% each year until then.

Changes Impacting Parents and the Next Generation

Increased Child Tax Credit

Beginning in 2026 with the TCJA sunset, the Child Tax Credit was set to shift back to $1,000 per qualifying child. Under the OBBB, it’s increasing from the TCJA’s $2,000 level up to $2,200, starting this year. Plus, starting in 2026, it will be tied to inflation to reflect cost-of-living changes.  Parents of multiple children will see the Additional Child Tax Credit remain the same at $1,700. 

Trump Accounts

Starting in 2026, the OBBB will create a brand-new type of tax-advantaged savings tool for children called Trump Accounts. Here’s how they’ll work …

• Children under age 18 are eligible.
• Children born between 2025 and 2028 can receive a $1,000 government contribution under a pilot program.
• Contributions will be capped at $5,000 annually (non-deductible).
• Money grows tax-free until it is withdrawn and must be invested in a broad stock index.
• Withdrawals are allowed at age 18 for a child to cover:
  • higher education,
  • a first-time home purchase (up to $10,000), and
  • starting a small business.
• Once cashed out, the distributions will be taxed as long-term capital gains if the funds are used for qualified purposes. Otherwise, they will be treated as ordinary income.

While these new Child Savings Accounts offer some flexibility, they may not be the go-to choice for education-focused families. Compared to a 529 plan, which allows for tax-free growth and tax-free withdrawals for qualified education expenses, these accounts fall a bit short on the tax-advantage front.

That said, they could be a helpful option for families whose children may not pursue college, since the funds can also be used for first-time home purchases or to start small businesses. It’s another tool in the planning toolbox, especially for those looking to give kids strong financial starts, wherever their paths lead.

While this article isn’t exhaustive, we hope it gives you a clear sense of what’s changing and what opportunities might be worth exploring. As always, we’ll be here to support you in the unique ways the One Big Beautiful Bill impacts you, your family, and your financial plan. If you have questions or want to talk through what this means for your situation, please don’t hesitate to reach out.