The One Big Beautiful Bill Act: What It Means for You and Your Taxes

Thomas J. Hanlon, CFA, CFP®, CEBS and Ryan T. Hanlon, CRPS™ |

Congress has officially passed the “One Big Beautiful Bill Act” (OBBBA) — a sweeping piece of tax legislation that makes permanent many of the provisions originally introduced under the 2017 Tax Cuts and Jobs Act. While the law touches a broad range of tax rules, there are several key areas that will impact individuals and families directly, especially retirees.

Let’s walk through the highlights that could affect your bottom line.

Tax Rates Stay Lower 

The OBBBA locks in the lower tax brackets (10%, 12%, 22%, 24%, 32%, 35%, and 37%) that were set to expire in 2026. That means no jump back to the pre-2018 higher rates. While “permanent” in D.C. doesn’t always mean forever, this is good news for long-term planning and tax efficiency.
These brackets will continue to adjust annually for inflation. There’s also some technical language suggesting a one-time inflation bump to the 10%, 12%, and 22% brackets in 2025 — so some middle-income earners may get a little extra breathing room.

What it means for you:

You’ll maintain access to lower tax brackets for the foreseeable future. This allows for stable tax planning, especially in retirement income and Roth conversion strategies.

Bigger Standard Deductions — Now Permanent 

For 2025, the standard deduction has been raised to:

  • $15,750 for Single
  • $31,500 for Married Filing Jointly
  • $23,625 for Head of Household
    Additional temporary increases through 2028 apply based on income levels.
What it means for you:

Fewer taxpayers will need to itemize, simplifying tax filing and potentially increasing your take-home income.

Big Wins for Seniors: New $6,000 Personal Exemption

If you're 65 or older, there’s an additional tax break coming your way — and this one is worth understanding.

First, let’s define it:
A personal exemption is a fixed amount you can deduct from your taxable income, based on who you are — not what you spend. Think of it as a “just for being you” deduction. These were suspended under the 2018 tax law, but OBBBA brings back a brand-new one just for seniors.

  • $6,000 per person age 65 or older
  • Applies to 2025 through 2028
  • Can be claimed in addition to the standard deduction
  • Phases out between:
    • $75,000 – $175,000 MAGI for single filers
    • $150,000 – $250,000 MAGI for married filers

If both spouses are 65+, a couple could get $12,000 in extra deductions, assuming income falls within the eligibility range.

Also, don’t forget: if you’re over 65, you still qualify for the additional standard deduction:

  • $2,000 for singles

  • $1,600 per person for married filers (so $3,200 if both are 65+)

New Deduction: Up to $10,000 of Car Loan Interest

One of the surprise inclusions in the bill is a temporary deduction for interest paid on car loans, available from 2025 through 2028.

You can deduct up to $10,000 in car loan interest — with some conditions:

  • The car must be assembled in the U.S.
  • The loan must be originated in 2025 or later
  • This deduction is not itemized — you can take it even if you use the standard deduction

But beware: it phases out at higher income levels:

  • Single: phased out between $100,000 and $150,000 MAGI
  • Married Filing Jointly: phased out between $200,000 and $250,000 MAGI

This could be a great incentive for those considering a new vehicle purchase — especially if you're planning to finance it.

Some Credits Are Going Away

A few popular energy-related credits are being unseated:

  • Electric Vehicle tax credits: gone after September 30, 2025
  • Home energy efficiency upgrades: credits end after December 31, 2025
  • Solar, wind, geothermal, and battery installation credits: also gone after December 31, 2025

If you’ve been on the fence about installing solar or upgrading your HVAC, this may be your final year to take advantage.

Tax-Free Tips & Overtime

Tips and overtime pay will now be exempt from federal income tax, up to:

  • $25,000 in tips
  • $12,500 in overtime
    Subject to income thresholds: $150K (single) / $300K (joint).
What it means for you:

This is a major benefit for hourly and service-based workers. It may affect your withholding and estimated tax payments. 

Estate & Gift Tax Provisions

Estate, gift, and GST tax exemptions permanently set at $15 million per person ($30 million for couples), indexed for inflation starting in 2026.

SALT Deduction Cap Increased

The State and Local Tax (SALT) deduction cap is raised from $10,000 to $40,000 (or $20,000 for married filing separately) and will be indexed for inflation. The increased cap begins to phase out for taxpayers with modified adjusted gross income (MAGI) over $500,000.

  • Duration: Temporary (applies to tax years 2025–2029)
  • Eligibility: Taxpayers who itemize deductions, especially those in high-tax states and within the qualifying income range

Enhanced Tax Benefits for Capital Investment and Innovation

  • Reestablishes 100% bonus depreciation through 2030, enabling businesses to fully and immediately deduct the cost of capital investments like equipment, vehicles, and technology.
  • Restores full expensing for domestic R&D activities from 2025–2029, providing a powerful incentive for innovation and onshore development.
  • Increases the Section 179 expense limit to $2.5 million, significantly enhancing tax efficiency for small and mid-sized businesses investing in growth.

Financial Planning Tips & Considerations

Tax Planning Insights
  • Standard vs. Itemized Deduction Strategy
    The increased standard deduction may reduce the need to itemize, particularly when paired with the temporary SALT cap increase. Review annually.
  • Maximize SALT Deductions While Available
    High-income earners in high-tax states should leverage the temporarily expanded deduction before it phases out.
  • Leverage Business Expensing
    Take advantage of the 100% bonus depreciation and R&D expensing provisions to invest in infrastructure and innovation.
  • Income Shifting Strategies
    Consider Roth conversions and related tax arbitrage strategies while lower tax rates remain in place.
  • Prepare for the Sunset of Temporary Provisions
    Build expiration timelines (2028–2029) into your long-term forecasts to anticipate higher future tax liabilities.

Next Steps

The OBBB introduces long-term certainty in many areas while creating new strategic opportunities in others. At Courier Capital, we are committed to helping you navigate these changes.

We encourage you to meet with your advisor to evaluate how these new provisions affect your personal situation and ensure your tax and estate planning strategies remain aligned with your goals.

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Disclaimer: This report is for general informational purposes only and does not constitute legal or tax advice. Tax laws are complex and subject to change. Please consult with your tax advisor or attorney for guidance tailored to your individual situation.  Courier Capital (“Courier”) is an SEC registered investment adviser.  Registration does not imply a certain level of skill or training.  Investing involves gains and losses and may not be suitable for all clients.  For information about Courier, including its registration, fees and services, please contact Courier or refer to the Investment Advisor Public Disclosure Website(www.adviserinfo.sec.gov).  Investment products and services are not FDIC Insured, are not a deposit or bank guaranteed, are not insured by any Federal governmental agency, and are subject to investment risks, including possible loss of the principal invested.