By Tim Courtney, Chief Investment Officer

The One Big Beautiful Bill Act¹ was signed into law on July 4. We now have more clarity on how tax and planning strategies will impact each of us for 2025 and future years. Here are ten key changes that you may wish to discuss with your advisor to determine if any action should be taken in the last half of the year.

1. The income tax brackets introduced by the 2017 Tax Cuts and Jobs Act are now permanent.² This gives taxpayers more certainty and allows for better long-term planning, particularly for Roth conversions, income acceleration, and capital gains strategies.
2. The standard deduction increases of 2017 are made permanent and are set to slightly increase in future years.³
3. The estate and gift tax exemption increases to $15 million per person and will increase in future years along with inflation.³ Without this change the exemption would have been reduced to the level in effect in 2016, roughly $5.45M.⁴
4. The State and Local Tax (SALT) deduction cap rises to $40,000 in 2025 and gradually increases through 2029.³ The benefit phases out for income above $500,000.³ This is especially relevant for clients in high-tax states.
5. Seniors aged 65 and older can claim an additional deduction from 2025 to 2028.³ This could affect strategies for claiming Social Security and Required Minimum Distribution (RMD) timing, but it is phased out at higher income levels.
6. Interest on certain new car loans will become deductible, up to $10,000.³ This above-the-line deduction could be a factor for those considering a purchase of a U.S. assembled auto.
7. Provisions for Achieving a Better Life Experience (ABLE) accounts, including expanded contribution limits and rollover options, are now permanent.³ This supports families with special needs planning without jeopardizing government benefit eligibility.
8. Opportunity Zone funds, which are tools used by those selling an asset to defer the taxes due on the gains of that sale, are expanded with a new round of OZ designations.³
9. A new type of tax-preferred savings vehicle, nicknamed “Trump Accounts,” will be available starting next year.³ These include with a one-time $1,000 federal credit for qualifying children and could complement college or homeownership savings plans.³
10. The $750,000 mortgage interest deduction limit is made permanent, while the disallowance of home equity loan interest remains.³ Financing strategies for home improvements or purchases may need to be adjusted accordingly.

Sources

1. The White House (7/4/25) - President Trump’s One Big Beautiful Bill Is Now the Law
2. Tax Foundation (7/23/25) - FAQ: The One Big Beautiful Bill Act Tax Changes
3. Congress.gov (7/4/25) - H.R.1 - One Big Beautiful Bill Act
4. Forbes (10/22/15) - IRS Announces 2016 Estate And Gift Tax Limits: The $10.9 Million Tax Break

Disclaimer: The information provided in this article is for educational purposes only and should not be considered as financial, tax or legal advice. Please consult with your financial, tax, and legal advisors to determine plans for your individual circumstances.

Exencial Wealth Advisors is an SEC registered investment adviser. Any references to the terms “registered investment adviser” or “registered,” do not imply that Exencial or any person associated with Exencial has achieved a certain level of skill or training.