The One Big Beautiful Bill Act (OBBBA), signed by President Donald Trump on July 4, 2025, brings sweeping changes to the tax code. While the name may sound like a marketing pitch, the law itself includes significant updates for individuals and businesses with substantial assets. From estate tax rules to bonus depreciation (including private jet) deductions, the OBBBA reshapes the planning landscape.
Below is a practical breakdown of key provisions along with insights tailored for high net worth families navigating the road ahead.
Key Provisions Affecting Individuals
Estate, Gift, and GST Tax Exemptions
Starting January 1, 2026, the federal estate and gift tax exemption will permanently increase to $15 million per person ($30 million for married couples), matched by the generation-skipping transfer (GST) tax exemption. Both exemptions will be indexed for inflation starting in 2027.
➤ Planning tip: With higher lifetime exemptions locked in, this is an ideal time to revisit your estate plan, gifting strategies, and long-term trust structures—especially if you have already used a significant portion of your current exemption.
Miscellaneous Itemized Deductions
Miscellaneous itemized deductions—including investment advisory fees, legal fees, and tax preparation costs—are now permanently disallowed for individual taxpayers for tax years beginning after December 31, 2025. Such miscellaneous itemized deductions were previously temporarily disallowed under the Tax Cuts and Jobs Act of 2017 for tax years beginning January 1, 2018, through December 31, 2025.
➤ Planning tip: Although these deductions are now permanently disallowed at the individual level, there may be planning opportunities to preserve deductibility through the use of trusts, closely held entities, or alternative fee arrangements.
Opportunity Zones
The Opportunity Zone program is now permanent, with new incentives for long-term investors. Capital gains can still be deferred by investing in Qualified Opportunity Funds (QOFs). Investors who hold a QOF investment for five years receive a 10% step-up in basis; those who hold for ten years can exclude future gains entirely—up to the investment’s fair market value after 30 years. A new Rural Opportunity Zone program offers a 30% step-up after five years for qualifying investments.
➤ Planning tip: For investors with large capital gains, Opportunity Zones continue to offer powerful tax deferral and exclusion benefits. With the new rural program and extended time horizons, it may be worth revisiting projects that were previously off the table.
Limits on Itemized Deductions
A new limitation applies to taxpayers in the 37% tax bracket. Specifically, itemized deductions are reduced by 5.41% of the lesser of (1) total deductions claimed or (2) the portion of income exceeding the dollar amount at which the top income bracket begins. Starting in 2026, charitable deductions will also be limited—they are only deductible to the extent they exceed 0.5% of the taxpayer’s contribution base (essentially, your AGI).
➤ Planning tip: High-income donors may get less value from charitable giving under these new rules. Consider front-loading gifts before year-end, using charitable lead or remainder trusts, or structuring gifts through private foundations or donor-advised funds.
State and Local Tax (SALT) Deduction
The SALT deduction cap increases to $40,000 in 2025, with a 1% annual bump through 2029, before reverting to $10,000 in 2030. This sounds great, but there is a catch: for taxpayers with modified AGI over $500,000 in 2025, the higher cap phases down, though it will not go below $10,000. Further, both the limit on itemized deductions discussed above and the Alternative Minimum Tax may provide an additional limitation or reduction on a taxpayer’s ability to take advantage of the increased SALT deduction cap.
➤ Planning tip: This creates a short-term window for high earners to benefit. Consider prepaying property or state income taxes in strong income years, while coordinating with income timing and charitable deductions.
Mortgage Interest Deduction
The deduction for mortgage interest is permanently capped at $750,000 of acquisition debt (or $375,000 if married filing separately). Deductions for home equity loans are permanently disallowed.
➤ Planning tip: With home equity interest no longer deductible, consider whether certain borrowings can be structured to qualify as investment interest instead—particularly when funds are used for portfolio or business opportunities.
Key Provisions Affecting Businesses
Qualified Small Business Stock (QSBS)
QSBS lets you sell stock in certain startups or small businesses with little or no capital gains tax, and now the rules are even better. For QSBS issued after July 4, 2025, you can exclude:
- 50% of the excludable gain under Section 1202 if you hold the stock for at least 3 years
- 75% after 4 years
- 100% after 5 years
The per-issuer gain exclusion limit increases to $15 million from $10 million for QSBS issued after July 4, 2025, and qualifying companies issuing stock after July 4, 2025, can now have up to $75 million in assets (up from $50 million), with both limits adjusting for inflation starting in 2027.
➤ Planning tip: If you are starting, funding, or investing in a private business, check if it qualifies for QSBS treatment. With higher limits and faster tax breaks, this is one of the most powerful tools for building wealth tax-free.
Bonus Depreciation for Business Assets
The law makes 100% bonus depreciation permanent for qualified business assets placed in service after January 19, 2025. This includes equipment, machinery, aircraft, and other eligible property.
➤ Planning tip: Business owners can now fully deduct the cost of capital purchases in the year of acquisition. Consider accelerating planned investments or financing large purchases to take advantage of the immediate tax benefit. If you are considering purchasing a jet or fractional interest, the tax savings may be substantial. To qualify, be mindful of ownership structure and use—particularly if personal and business use overlap.
Business Interest Deduction Limitation
The business interest deduction is now permanently based on EBITDA (earnings before interest, taxes, depreciation, and amortization), restoring the more favorable pre-2022 formula.
➤ Planning tip: This change increases interest deductibility, which can improve after-tax returns on leveraged investments or acquisitions. Consider reviewing financing structures to take advantage of the more generous rule.
Qualified Business Income (QBI) Deduction
The 20% QBI deduction for pass-through business income is now permanent, with expanded phase-in thresholds: $75,000 for single filers and $150,000 for joint filers.
➤ Planning tip: This is a lasting benefit for owners of LLCs that have not elected to be treated as C corporations, partnerships, and S corps. Make sure your business structure, compensation, and income levels are optimized to fully capture the deduction.
Conclusion
The OBBBA brings lasting changes to the tax landscape—many of them favorable to high net worth individuals and business owners. From expanded exemptions and deductions to enhanced planning tools like QSBS and Opportunity Zones, the law opens the door to meaningful tax savings. But the details matter. Some provisions require proactive steps, and others come with new limits or reporting requirements.
The Cozen O’Connor Private Client, Trusts and Estates team is here to help you make the most of the opportunities—and avoid the pitfalls.
For a fuller discussion of the tax implications of a number of these topics, please see updates from our Tax group, including Expansion of QSBS Benefits Under the One Big Beautiful Bill, Tax Provisions Under One Big Beautiful Bill Affecting Real Estate Investment, and Changes to Itemized Deductions in the OBBBA.
