The One Big Beautiful Bill Act (OBBBA) introduces sweeping changes to the U.S. tax code, with major implications for high-net-worth individuals. Whether you’re focused on preserving wealth, investing for growth, or planning your legacy, this guide breaks down the most important updates in plain English—so you can make informed decisions and stay ahead of the curve.

The OBBBA is a large and complex tax bill, while we summarize some of the potential impacts this bill may have on your personal tax planning, we are unable to cover all scenarios. This guide is for informational purposes and does not replace professional tax advice. Consult your Pivot CPAs advisor for guidance tailored to your situation.

1. Estate and Gift Tax: Bigger Exemptions, Bigger Opportunities

The federal estate and gift tax exemption has been permanently increased to $15 million per person, or $30 million for married couples. This means you can transfer more wealth to heirs without triggering federal taxes. The exemption will also adjust for inflation annually.

The generation-skipping transfer (GST) tax—which applies when you leave assets to grandchildren or other younger beneficiaries—now matches the same $15 million limit. These changes make it easier to set up long-term trusts and pass on wealth efficiently.

What to do: Revisit your estate plan and gifting strategy. You may be able to transfer more assets tax-free than ever before.

2. Income Tax, Child Tax Credit and Charitable Deductions: New Limits

The top income tax rate remains at 37%, but deductions are now less valuable for high earners. If you’re in the highest bracket, your itemized deductions (like mortgage interest or charitable donations) will save you less on taxes than before.

There is also a permanent increase to the Child Tax Credit to $2,200 per child, with $1,400 of that being refundable. The threshold to claim that deduction is now $200,000 for single taxpayers and $400,000 for married taxpayers.

Charitable giving rules have also changed. You can only deduct donations that exceed 0.5% of your income, although there’s a small bonus: even if you don’t itemize, you can deduct up to $1,000 (or $2,000 for couples) for cash donations made during the year.

What to do: Consider using donor-advised funds or charitable trusts to maximize your giving and preserve tax benefits.

3. SALT Deduction and Expense Limits

The State and Local Tax (SALT) deduction cap has been temporarily raised to $40,000 for married taxpayers, but it starts to phase out for incomes over $500,000 and decreases back to the original $10,000 cap for those earning more than $600,000.

Additionally, some common expenses—like fees for financial advisors, legal services, and tax preparation—can no longer be deducted.

What to do: Explore using trusts or business entities that may help preserve deductibility for certain expenses.

4. Investment Incentives: More Rewards for Long-Term Growth

If you invest in startups or small businesses, the new rules around Qualified Small Business Stock (QSBS) are a major win. You can now exclude:

• 50% of gains after 3 years

• 75% after 4 years

• 100% after 5 years

The maximum exclusion per company has been raised to $15 million, and more businesses qualify thanks to a higher asset cap of $75 million.

The bill also makes Opportunity Zones permanent and introduces Rural Opportunity Zones, which offer a 30% step-up in value after five years.

What to do: Consider allocating more capital to qualifying startups or Opportunity Zones to take advantage of these generous tax breaks.

5. International Tax: More Income Now Taxable

If you own part of a business overseas, the rules have changed. The old system for taxing foreign income—called GILTI—has been renamed Net CFC Tested Income (NCTI) and made stricter. You can no longer subtract the value of certain assets when calculating what’s taxable, which may increase your tax bill.

What to do: Review your international holdings with a tax advisor to avoid unexpected liabilities.

6. Energy Credits: Get Them Before They’re Gone

If you’re thinking about buying an electric vehicle (EV) or making energy efficient home improvements, this bill will be taking those credits away. But not yet!

The law keeps the existing federal EV tax credit of up to $7,500 in place until September 30, 2025 , but it comes with income and vehicle price limits. If your income is over $300,000 (for married couples) or the EV costs more than $55,000–$80,000 depending on the type, you won’t qualify. For single taxpayers, the limit is $150,000. That means most luxury EVs are excluded, and high earners are effectively shut out of the credit. There is also a $4,000 used EV credit but those income caps are lower at $150,000 for married taxpayers and $75,000 for single taxpayers. You can use either your income based on 2024 or for 2025 for both credits.

For Energy Efficient improvements to your home, the OBBBA removes most of the previous energy credits either on December 31, 2025 or on June 30, 2026 depending on the improvement. That means if you’re planning to make energy-efficient improvements to your home, it’s wise to act soon to take advantage of the current tax savings before they shrink or disappear.

What to do: If you’re considering an EV or energy improvement to your primary residence, act quickly to take advantage but make sure you know what qualifies before you buy.

7. Casualty Loss deduction

Under OBBBA, the rules for claiming a casualty loss deduction have been made permanent for federally declared disasters and now allow for certain state declared disasters.

What to do: If you’ve experienced a personal loss, keep detailed records and receipts—you may now be able to deduct more than before.

8. No Tax on Overtime or Tips

To support working-class earners, OBBBA exempts overtime pay and tips from federal income tax—up to $25,000 per year for tips and $12,500 per year per person for overtime. Both of these situations are limited to those with income less than $150,000 for single taxpayers and $300,000 for married taxpayers. This applies to W-2 employees and service industry workers who report tips.

What to do: If you earn tips or work overtime, track your income carefully. You may see a smaller tax bill or a larger refund.

9. Increased Deductions for Seniors

Taxpayers age 65 and older now get an additional $6,000 bonus deduction per individual. This is phased out for high income earners over $75,000 (single) or $150,000 (married).

10. New Car Loan Interest Now Deductible

For the first time in decades, interest on new car loans is deductible—up to $10,000 per year. This applies only to loans secured by personal-use vehicles whose final assembly was completed in the U.S. that were purchased after January 1, 2025, and does not include leases or used cars.

What to do: If you’re planning to buy a new car, consider financing instead of paying cash to take advantage of this deduction.

11. Discharge of Student Loan Indebtedness upon Death

If a borrower dies or becomes permanently disabled, any remaining federal student loan debt will be discharged tax-free. This provision is now permanent and applies to both the borrower and any co-signers.

What to do: If you’re a co-signer on a student loan, this change offers peace of mind. No action is needed, but it’s worth noting in your estate planning.

12. 529 Plan Qualified Expenses

OBBBA expands what counts as a qualified expense under 529 college savings plans. You can now use funds for apprenticeship programs, student loan repayments (up to $15,000 per beneficiary), K–12 tutoring and test prep and certain international education programs

What to do: Review your 529 plan strategy—these new options may help you support a broader range of educational goals.

13. Trump Accounts

Trump Accounts are a new type of retirement savings vehicle for those under age 18. For children born between 2025-2028, these accounts receive a one-time federal deposit of $1,000. However, these accounts can be set up for anyone under 18, with funding allowed beginning July 2026 for an annual contribution limit of $5,000 after-tax dollars. These can be withdrawn tax-free after the age of 59 ½ without penalty, however many exceptions such as college and a first-time home purchase will qualify for a penalty exception. Unlike Roth IRAs, there are no income limits to contributors.

What to do: If you’ve maxed out other retirement accounts, consider opening a Trump Account to grow additional savings tax-free.

Final Thoughts

The OBBBA brings both opportunities and challenges for wealthy individuals. From expanded estate exemptions to new investment incentives, the law rewards proactive planning and long-term thinking. Now is the time to revisit your financial strategy, work with trusted advisors, and make the most of what the new law offers.

This guide is for informational purposes only and does not constitute legal or financial advice. Consult a qualified tax professional for personalized guidance.