Big tax law changes don’t come around every year. But when they do, like with the recent passage of the OBBBA (Optimal Business & Beneficial Benefits Act), they reshape the entire playing field for individuals and families planning their finances.
If you’re a taxpayer, or the advisor helping them, understanding what’s changing (and what’s staying put) is important. We’ll break down what matters now, what’s coming next, and where proactive planning can create real opportunities.
Why the OBBBA Matters
The OBBBA is the most significant tax overhaul since the Tax Cuts and Jobs Act (TCJA) of 2017. It makes some provisions permanent, introduces new deductions, and phases out others. For individuals, this means:
- Immediate opportunities in 2025 (hello, EV and solar credits)
- Long-term certainty on tax rates (a rare gift in tax planning)
- Major estate planning shifts starting in 2026
- Strategic changes for charitable giving and itemized deductions
Bottom line: This isn’t business as usual. The moves you make now can set you up for years of savings – or missed opportunities.
2025: What You Should Do Now
- Take Advantage of Expiring Credits
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- Residential solar and energy efficiency credits are available only through 2025.
- Electric vehicle credits end after 2025 (purchases after October 2025 don’t qualify).
If you’ve been on the fence about installing solar panels or upgrading to an EV, 2025 is your last call to grab a 30% credit.
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- Plan Around New Deductions for Workers
For 2025-2028, several new above-the-line deductions could benefit working families:- Tip income deduction (up to $25,000)
- Overtime pay deduction (up to $25,000 for joint filers)
- Car loan interest deduction (up to $10,000 for U.S.-assembled vehicles)
Tip: These deductions phase out for higher earners, so accurate income tracking will be essential.
- Know the New Rules for Seniors
A senior bonus deduction gives taxpayers 65+ an extra $6,000 ($12,000 for couples) through 2028. But it phases out at $75,000 single/$150,000 joint MAGI. For seniors in this bracket, this is automatic – but worth double-checking during tax prep. - Leverage the SALT Cap Increase
From 2025-2029, the SALT deduction cap jumps from $10,000 to $40,000. High-income earners may see partial phase-outs, but this is a big win for those in high-tax states. Trust strategies or pass-through entity elections could maximize this benefit for certain clients.
Long-Term Changes Coming in 2026
- Estate Planning Gets a Massive Boost
The estate and gift tax exemption jumps to $15 million per person starting January 1, 2026 (indexed for inflation). Married couples can shield $30 million from estate tax. Permanently.
This is a game-changer for high-net-worth families. Dynasty trusts, gifting strategies, and multigenerational planning will look very different under this new framework. - Charitable Giving Strategies Must Evolve
Starting in 2026, itemizers can only deduct donations exceeding 0.5% of AGI. Standard deduction filers get a modest $1,000/$2,000 above-the-line deduction.
Translation: Bunching donations or using donor-advised funds becomes essential. Accelerating big gifts into 2025 might also make sense. - Family and Education Updates
- Child Tax Credit rises to $2,200 per child in 2025 and will be inflation-adjusted from 2026 onward.
- 529 plan limits double for K-12/vocational expenses (up to $20,000/year).
- New “Trump Accounts” give parents $1,000 per child born 2025-2028 to save for education or a first home.
Important Takeaways for Individuals
- Certainty in rates: TCJA brackets are now permanent, which simplifies multi-year planning.
- Immediate opportunities: EV and solar credits, new worker deductions, senior bonus deductions.
- Future-focused moves: Estate planning and charitable giving strategies need revisiting by 2026.
- SALT cap relief: Big benefit for high-tax states through 2029.
What This Means for You (and Why It’s Time to Act)
The OBBBA changes are sweeping but also nuanced. Some benefits are temporary. Some are permanent. Some phase out. And others, like the charitable giving floor, might catch taxpayers off guard if they’re not planning ahead.
At Harper & Co CPAs Plus, we see this as an opportunity to get ahead of the curve:
- We’re already modeling tax strategies for clients based on these new rules.
- We’re guiding families through the estate planning revolution set to begin in 2026.
- We’re helping individuals maximize short-term credits while aligning long-term goals.
The tax landscape isn’t getting simpler – but with the right guidance, it can absolutely work in your favor.
Need Help Understanding These Changes?
This is exactly what we do. Our team lives and breathes proactive tax planning. We’re here to translate complex legislation into strategies that protect your wealth, minimize surprises, and position you for growth.
Reach out to us today to schedule a consultation and make sure you’re ready for 2025, 2026, and beyond.
Harper & Co CPAs Plus: Trusted advisors. Strategic partners. Always ahead of the curve.
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