The Most Important Changes in the One Big Beautiful Bill Explained, Ep #264

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Tax laws may not be flashy, but understanding them can tilt the balance for your family’s finances and peace of mind. I’m digging into the details of the much-talked-about “One Big Beautiful Tax Bill”, a huge piece of tax legislation that’s set to impact families, retirees, and investors across the country.

I break down the most important highlights from the massive 870-page bill, focusing on what really matters for everyday listeners: permanent income tax brackets, bigger standard deductions, expanded SALT limits, and significant new deductions for seniors. 

Tune in for clear, actionable insights on the changes coming to your taxes, and learn how to make these updates work in your favor.

Outline of This Episode

  • [04:27] Tax act extension highlights.
  • [07:22] Inflation adjustment for tax brackets.
  • [10:38] Tax deduction and SALT cap changes.
  • [13:23] Maximize your deductions and minimize taxable income.
  • [18:53] Estate tax and deductions update.
  • [22:08] Permanent deductions and brackets.
  • [23:45] Tax benefits for families.

Tax Brackets and Standard Deduction: More Certainty, Bigger Benefits

One of the most interesting aspects of the One Big Beautiful Bill (OBBB) is the permanent extension of the income tax brackets Americans have become accustomed to since the Tax Cuts and Jobs Act (TCJA) of 2017. Instead of the cliff that was looming at the end of 2024, current rates (10%, 12%, 22%, 24%, and 32%) are now here to stay. This certainty means families, investors, and business owners can plan with clarity, knowing that the 10% and 12% brackets won’t suddenly vanish.

But there’s more: in 2026, the 10% and 12% brackets will receive extra inflation adjustments, leading to a few hundred dollars of potential tax savings just for staying under those thresholds. While many American households may not climb out of the 12% bracket, those who do will benefit even more.

Another major win is the increase in the standard deduction, now $31,500 for married couples filing jointly and $15,750 for single filers, starting in 2025. Add in automatic inflation adjustments, and the vast majority of taxpayers are now better off taking the standard deduction rather than itemizing, unless big deductions, like SALT, tilt the scale.

The Expanded SALT Deduction

Under OBBB, the State and Local Tax (SALT) deduction cap explodes from $10,000 to $40,000, restoring much of the pre-2017 advantage. For married couples with large property and state income taxes, this unlocks greater ability to itemize rather than default to the standard deduction.

But this expanded cap begins phasing out for adjusted gross incomes above $500,000 and is gone by $600,000. Smart, ongoing tax planning, tracking income, maximizing deductions, and timing bonuses or retirement contributions can make the difference between using the full deduction or losing out.

Enhanced Deductions for Those 65+

For retirees, the bill introduces a temporary enhanced standard deduction: if you’re over 65, you can deduct an additional $6,000 per person (that’s $12,000 for a married couple) in 2025-2028, on top of other standard deductions. It’s available whether you itemize or not. This deduction is phased out for higher incomes—starting at $150,000 for married couples.

For planners and retirees considering Roth conversions or IRA withdrawals, being strategic about income in these years could mean paying zero tax on a significant chunk of retirement income.

Child Tax Credit and Estate Tax Changes

Families will be happy to hear that the expanded Child Tax Credit is now permanent. It not only remains at $2,000, but is increased to $2,200 per qualifying child under 18, and (for the first time) will be indexed for inflation from 2026 onward. Income phaseouts apply, but most middle-class families can continue to count on this boost.

Lifetime estate and gift tax exemption is set high, $30 million for married couples, $15 million for singles, through 2026, giving ultra-high-net-worth families greater latitude in legacy planning.

Resources Mentioned

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Podcast Disclaimer:

The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the US Securities and Exchange Commission in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment, or legal advice.

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About the author, Scott Wellens

Scott Wellens, CFP® is an investment advisor and founder of Fortress Planning Group. After earning his Bachelor of Science degree from the University of Wisconsin-Oshkosh, Scott quickly ascended to become a Vice President of North American Sales at a major regional provider of telecommunications infrastructure. While financially successful in this role, Scott searched for ways to pursue his passion related to financial literacy and providing financial freedom for both his own family and others. During his search, Scott became curious about the significant gap he found in the financial services sector: he was unable to find a comprehensive financial planner that maintained a family stewardship lens without being attached to financial products. Scott decided to fill that gap by creating his own planning firm that maintains a strong passion for comprehensive, unbiased wealth planning that is genuinely client-centered.

Scott resides in Menomonee Falls, WI with his family. He is the father of three active and independent daughters who keep him on his toes. Scott is an active community member, serving on the Hamilton Education Foundation Board, serves as a Dave Ramsey Financial Peace facilitator and leads the All Pro Dad’s group at their local elementary school. Scott enjoys spending his free time visiting state parks with his family, reading, and watching the Milwaukee Bucks and the Green Bay Packers win ball games.

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