On July 4, 2025, Congress passed and President Trump signed into law the One Big Beautiful Bill Act (OBBBA), a sweeping piece of tax legislation. Unlike prior laws that were set to expire, many provisions under OBBBA are intended to provide longer-term clarity. For families, investors, and donors to charity, this law reshapes the playing field of estate and income taxes — at least until the next time Congress decides to redraw the lines!
Here are the highlights most likely to affect you and your planning.
Estate Tax Relief
For years, one of the biggest questions was whether the large estate tax exemption created by the 2017 Tax Cuts and Jobs Act (TCJA) would expire at the end of 2025. Under OBBBA, that uncertainty is gone:
- Beginning in 2026, the estate tax exemption will rise to $15 million per person (or $30 million per married couple), with annual inflation adjustments.
- Families with estates in the $15 million–$30 million range now have more certainty and less risk of facing estate taxes.
What This Means for You
Even if your estate falls below these levels, it’s still important to keep your estate plan up to date. We recommend reviewing estate plans every three to five years — if your wills and trust were last reviewed before Covid-19, it is time for another look! Your Forum advisor can coordinate a review with your attorney to ensure your plan reflects current law and your goals. Keep in mind that some states still impose their own estate or inheritance taxes.
Income Taxes and Deductions
Most of the law’s changes focus on income taxes, including adjustments to deductions:
- Standard Deduction: Permanently increased to $15,750 for singles and $31,500 for couples (2025 figures), adjusted annually for inflation.
- Additional Deduction for Seniors: Taxpayers age 65+ receive an extra temporary deduction of $6,000 single/$12,000 joint from 2025–2028. (This phases out at higher income levels.) Note that Social Security benefits remain as taxable as they have been.
- State and Local Tax (SALT) Deduction: The cap increases temporarily to $40,000 beginning 2025, goes to $40,400 in 2026 with further 1% increases for 2027 through 2029, then reverts to $10,000 in 2030. Higher-income households may see this phased down to the minimum $10,000 deduction. See this article if you’re looking for more specifics.
- Limits for Itemizers: High earners in the 37% bracket will see a modest reduction in the tax value of their itemized deductions, including charitable gifts.
What This Means for You
Many households will continue to find the standard deduction more favorable than itemizing. For state taxes, the rules may differ, so itemizing could still be worthwhile. We recommend reviewing your options annually with your Forum advisor and tax preparer to achieve the best tax result.
Charitable Giving Rules
OBBBA contains several provisions directly affecting charitable gifts:
- New Deduction for Non-Itemizers: Starting in 2026, taxpayers who take the standard deduction can claim up to $1,000 (single) or $2,000 (joint) for cash gifts to qualified charities.
- New Floor for Charitable Deductions: Charitable deductions beginning in 2026 apply only to the extent they exceed 0.5% of adjusted gross income (AGI).
- New Scholarship Credit: Beginning in 2027, donations to approved scholarship-granting organizations can qualify for a credit of up to $1,700.
- Deductibility: Up to 60% of AGI for cash gifts is made permanent.
Practical Impact
Whether you give through cash, appreciated stock, or qualified charitable distributions from IRAs, charitable planning will need closer coordination with your overall tax situation. A year-end tax projection can help determine which strategies make sense.
Business Owner Provisions
- Qualified Business Income Deduction (QBI): The 20% deduction is now permanent, with expanded phase-in ranges and a new $400 minimum deduction for taxpayers with at least $1,000 of QBI from an active business.
- Pass-Through Entity Tax (PTET) Deduction: Remains intact without new limitations.
- 100% Bonus Depreciation: Available again for qualified business property acquired after January 19, 2025, allowing full deductions up front.
Other Notable Changes
- No Tax on Tips and Overtime: Temporary deductions through 2028 of up to $25,000 for tips and $12,500 ($25,000 joint) for overtime, phased out at higher incomes. Payroll taxes still apply.
- Alternative Minimum Tax (AMT): More middle- to upper-income households ($300,000–$500,000 range) may once again be subject to AMT in the 2026 tax year.
- “Trump Accounts” (New Form of IRA for Children Under 18): Contributions are capped at $5,000/year. Employers can contribute as well, and families may qualify for a $1,000 credit for children born 2025–2027.
- Car Loan Interest: Temporary deduction (2025–2028) for interest on first-lien loans on new US-assembled passenger vehicles, capped at $10,000/year. Phased out at higher incomes.
- Section 1202 Qualified Small Business Stock Exclusion (QSBS): Exclusion amounts are now tiered by holding period: 50% after three years, 75% after four years, and 100% after five years. The eligible company asset limit increases from $50 million to $75 million, and the exclusion amount increases from $10 million to $15 million.
The Bottom Line
The new law provides clarity on estate taxes and makes some changes to charitable giving, while also introducing complexities for deductions, income, and business planning. With so many changes, the Treasury Department and the IRS are still finalizing their guidance on how these changes will be implemented. The key takeaway is that tax planning will look different in the years ahead.
At Forum, we’ll help you evaluate:
- Whether to take the standard deduction or itemize.
- How to structure charitable gifts for maximum impact.
- How estate tax changes affect your long-term plans.
- New provisions that may create opportunities — or pitfalls — for your situation.
If you’re considering making significant gifts, updating your estate plan, or simply want to understand how these changes apply to you, now is a great time to schedule a conversation with your Forum advisor.
The information provided reflects our understanding of current legislation as of October 2025 and may change if new IRS guidance is issued. It is intended for general educational purposes and should not be considered tax, legal, or investment advice. Laws and interpretations may evolve over time, so we encourage you to consult your tax or legal professional regarding your specific situation.
Forum Financial Management, LP (“Forum”) is registered as an investment adviser with the U.S. Securities and Exchange Commission. The firm’s home office is located at 1900 South Highland Avenue, Suite 100, Lombard, IL 60148. Before making any investment decision, please contact our office at (630) 873-8520 to request a copy of Forum’s Investment Advisory Agreement and Form ADV Part 2A, which includes the firm’s fee schedule. For additional information, visit our website at www.forumfinancial.com
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