The passage of the One Big Beautiful Bill Act has many excited for extensions from the 2017 Tax Cuts and Jobs Act legislation. Others are feeling disheartened by the significant cuts made to important programs like Medicaid and SNAP.

Regardless of your personal viewpoint, from a planning standpoint, it’s important to understand what it means to you and your situation, as many of its provisions will take effect with this tax year. 

Much of the bill is business as usual with current income tax rates and capital gains tax rates extended for individuals, but there are some key provisions you may be able to take advantage of:

• The State and Local Tax (SALT) deduction cap increased from $10,000 to $40,000 per household starting with the 2025 tax year through 2029. The rapid phaseout of this deduction begins for taxpayers with incomes exceeding $500,000, single or filing jointly.
• There is an additional, temporary deduction of $6,000 per senior who is 65 and above to help offset taxes paid on Social Security benefits. This deduction will begin to phase out for single filers with an annual income of $75,000 and joint filers with a combined yearly income of $150,000.
• The estate tax, gift tax, and generational-skipping transfer tax exemptions will increase from $13.99 million to $15 million per person beginning in 2026, indexed for inflation.
• Beginning in 2026, individuals can establish a new tax-advantaged Trump account. Those born in 2025 through 2028 could be eligible for a $1,000 contribution from the federal government. Additional contributions can be made by family, friends, and others on behalf of the account holder with a $5,000 cap per year.
• Corporate tax rates, which were reduced in 2017, remain at the current level of 21 percent. For pass-through businesses, the deduction for Qualified Business Income under Section 199A remains at 20 percent, and the threshold for Specialized Service Businesses has increased from $100,000 to $150,000 for joint filers and from $50,000 to $75,000 for all other taxpayers.

With income tax rates staying low for a while, now may be an ideal opportunity to consider a Roth conversion. There may also be an opportunity to utilize a non-grantor trust that leverages the SALT deduction while being mindful of tax brackets and phase-outs. Tax planning is only one part of financial planning. That process should start with identifying, quantifying, and prioritizing your goals so you can align your resources with your well-defined purpose.  

The bill is long, and there is a lot to digest. A financial advisor can discuss the new legislation and its potential impact on you and your financial planning by ensuring you’re prepared for the changes.

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Mark Bradford is the Director of Wealth Planning at Bryn Mawr Trust, where he leads the wealth planning team. He collaborates closely with advisors to develop and implement Bryn Mawr Trust’s long-term vision for wealth planning, which focuses on enhancing client relationships by providing an exceptional client experience through comprehensive and personalized planning.