On July 4, 2025, the President signed the One Big Beautiful Bill Act.
The Act includes some very advantageous business and estate planning features. Here is a quick summary:
July 4 fireworks
- The federal Estate Tax lifetime exemption moves to $15 million in 2026, will be indexed to inflation thereafter, and is now permanent. The "sunsetting" of the 2017 exemption and its adjustments has been replaced with a higher, permanent exemption.
- Section 199A pass through QBI is now permanent.
- Expands 529 accounts to allow additional educational expenses.
- Changes to Section 1202 qualified small business stock (QSBS) benefits—with the required holding period reduced from 5 to 3 years, capital gain exclusion increased from $10 million to $15 million, and gross asset limit increased from $50 million to $75 million.
- Increase State and Local Tax Deduction cap to $40,000.00.
- Extends the paid family and medical leave credit.
- Income tax deduction for Tip Income - a temporarily allowance of up to $25,000 for qualified tips received in an occupation that customarily and regularly receives tips from 2025 through 2028.
- Income tax deduction for Overtime Income - a temporary allowance of up to $12,500 ($25,000 for joint returns) for qualified overtime compensation received in a given tax year (phased out MAGI).
Stay tuned for more detail and summary of how to apply these features to your business or estate plan.
Contact our attorneys to learn more.
