On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA), culminating a feverish run of legislative activity for Republicans to finish their budget reconciliation process by the president’s deadline. The legislation creates several opportunities and removes the fear of expiring provisions to help preserve family wealth and long-term planning for owner-operated businesses.

The OBBBA was needed to offset expiring provisions of the Tax Cuts and Jobs Act (TCJA) of 2017, which were scheduled to expire at the end of 2025. Without the OBBBA’s enactment, individual income tax rates would have increased, and the unified exemption rate for estate and gift tax planning would have been dramatically reduced. New taxpayer-friendly provisions, such as expanding the exclusion for Qualified Small Business Stock and permanently extending 100% bonus depreciation, bring planning opportunities. The OBBBA includes pay-fors as well, such as a new floor on charitable deductions and permanently extending the excess business loss rules for non-corporate taxpayers. But these pale in comparison to some of the proposed revenue raisers that were omitted from the OBBBA, such as tax rate increases for high-income individuals, new limits on carried interest, and higher excise tax rates on private foundations.

The following discussion outlines the top tax changes high-net-worth individuals, family offices, and closely held businesses must navigate. For a discussion of other OBBBA provisions, see this Andersen Tax Release.

Qualified Small Business Stock Benefits Expanded

New qualified small business stock (QSBS) rules apply to stock acquired after July 4, 2025, with a tiered gain exclusion: 50% after a three-year holding period, 75% for four years, and 100% after five or more years. The per-issuer cap is now $15 million (up from $10 million), and the company asset limit has increased to $75 million (from $50 million), expanding access to the benefit for future startup and private equity investments. Taxpayers considering investments in early-stage companies, structuring them to meet the new QSBS requirements, could offer significant future tax savings. Now is a good time to assess whether upcoming deals qualify, especially with the higher asset threshold expanding eligibility.

Increased SALT Deduction Limit Without Pass-Through Restrictions

The TCJA, since 2018, has limited state and local tax (SALT) deductions to $10,000 for taxpayers who itemize their income tax return. The OBBBA, starting in 2025, increases, albeit temporarily to 2029, the limit to $40,000 (with 1% yearly increases), with a phase-out beginning at adjusted gross incomes of $500,000, with a full phase-out at $600,000. Typical tax planning strategies, like Roth conversions, may not be helpful if the added recognized income brings the taxpayer into the phase-out range, as such an effort would reduce the SALT deduction and technically raise the effective tax rate.

Floor on Deducting Charitable Contributions for Itemizers

A new rule, for taxable years beginning after December 31, 2025, limits charitable deductions — only amounts above 0.5% of a taxpayer’s adjusted gross income will be deductible each year. Given that this change starts in 2026, this is a good time to work with a tax advisor to model your charitable giving for the rest of 2025.

Permanent Lower Income Tax Rates and Higher Lifetime Estate and Gift Tax Exemption Amounts

The OBBBA maintains the TCJA’s income tax rate structure, with the top rate set at 37%. Starting in 2026, the federal estate, gift, and generation-skipping transfer tax exemptions will permanently increase to $15 million (indexed for inflation). For very wealthy taxpayers, the increase in the exemption simply means continued use of the exemptions. However, for the “middle-rich” taxpayers, the increase in exemption places greater importance on the basis and the basis step-up at death, particularly for assets like real estate, where a basis step-up can also reset depreciation. This planning can involve a basis versus estate tax saving analysis, increasing the value of assets that would be included in an estate by, for example, removing discounts, or making use of other family members’ exemptions who would not have taxable estates to create a basis step-up (for example by including them as trust beneficiaries and giving them a general power of appointment).

Non-Corporate Excess Business Loss Rules Stay the Course

The current rules for excess business losses (EBLs) for non-corporate taxpayers are now permanent under the OBBBA. Proposed restrictions on how carried-over EBLs are treated were not included in the final legislation. This permanence provides more clarity for long-term planning—taxpayers with ongoing business losses may want to revisit entity structure, income timing, or grouping elections to better align with these rules and maximize loss utilization.

Bonus Depreciation Impact on Businesses

The legislation permanently reinstates 100% bonus depreciation for qualified property (e.g., aircraft) acquired after January 19, 2025. This change removes the continuing phase-down of the bonus depreciation percentages that started in 2023 under the TCJA (40% for 2025). Taking 100% bonus depreciation on qualified business assets provides businesses with an immediate impact on the business taxpayers’ bottom line. A complicating factor is the state tax impact of this change, as many states do not follow or limit the federal rules on bonus depreciation.

Why It Matters

The enactment of the OBBBA provides more tax planning certainty. The permanent income tax rates and estate and gift exemption amounts allow high-net-worth individuals and their families to plan with more confidence, knowing that key tax provisions will not expire after 2025. Modeling these provisions for future tax years may reap rewards.

The Takeaway

The tax benefits and revenue raisers in the OBBBA have created planning opportunities and offer near-term certainty for high-net-worth individuals, their families, and businesses. The items omitted from the sweeping new tax law, such as the higher tax rate on higher-income individuals and modifying the tax treatment of carried interests, could be a sign of things to come. The enactment of any significant piece of tax legislation requires taxpayers and tax professionals to plan for future activities. Taxpayers should review their current estate and tax plans with their advisors, consider wealth transfer strategies, revisit charitable giving strategies, and stay informed, as tax laws continue to evolve for better or worse.

View Q3. 2025 For the Record Newsletter