What do I need to know about the “One Big Beautiful Bill Act” Changes and How it Impacts Me
What do I need to know about the “One Big Beautiful Bill Act” Changes and How it Impacts Me
Signed into law in July 2025, the One Big Beautiful Bill Act (OBBBA) is one of the most sweeping tax updates in years. While it touches many areas of the tax code — from mortgage deductions to philanthropy to estate planning.
Here’s the plain-English breakdown of what’s new, what it means, and the strategies that can help you keep your tax benefits while supporting the causes you care about.
OBBBA Changes That Matter for Tax Planning
While many of the changes enacted for the tax law pertain to those most visible for philanthropists, OBBBA also includes provisions that could influence your overall tax strategy. Some of the most important aspects include:
🚗 Electric Vehicle credits are driving away!
EV tax credits end after 2025 — act now if you’ve been considering buying an electric vehicle. Tax credits will only be available to you if you purchase AND take possession of your vehicle before September 30, 2025.
🧂SALT (State and Local Tax deduction) cap is increased, but only through 2029.
The SALT cap (or State and Local Taxes) cap is increased to $40K until 2029 — a short-term benefit for those in high-tax states. If you itemize, your SALT deduction will increase from $10,000 to $40,000 which works great if you’re in a high tax state (think coastal states like MA, CA, and NY). This does phase out, however, if you’re a filer with more than $500k of income.
📈 The Federal Estate and Gift Tax Exemption has increased, and Basis Planning is more important than ever.
Starting in 2026, the Federal Estate and gift tax exemption is increased to $15million per person, or $30 million per couple. This means that the majority of estates will not be subject to federal estate taxes.
This also means that we should now focus on BASIS planning. When structured correctly, your estate plan can allow your loved ones to inherit assets with a low cost basis, at the STEPPED UP basis, or value on the date of death.
For example, you’ve owned Apple for decades, and your current portfolio has an average cost basis of $50 per share of Apple. If you died today, your loved ones could inherit a date of death cost basis. With Apple trading well over $200 per share – this offers them a great tax benefit. Discuss your assets, including the cost basis, with your advisors today – they may have changes to recommend to your estate plan!
✂️ Tax Cuts that Stick around.
OBBBA made the 2017 TCJA (Tax Cut and Jobs Act) tax cuts permanent – this includes tax brackets, the higher standard deduction, and the QBI (Qualified Business Income) deduction.
🧑🧑🧒🧒 More help for Families.
OBBBA expanded the Child Tax Credit, raising the maximum from $2,000 to $2,200 and adjusting it for inflation starting in 2026.
It gave seniors an extra deduction of $6,000 off their taxable income (subject to MAGI limits).
Interest on personal car loans is now tax-deductible (from 2025 – 2028 and subject to MAGI phaseouts).
🫴🏽 What are the Key OBBBA Changes That Affect Charitable Giving?
One of the biggest shake-ups in the OBBBA is in charitable giving
By far, one of the biggest shake-ups in the OBBBA is in charitable giving. If you give to charity regularly, already use a Donor-Advised Fund (DAF), or are thinking about large donations in the next few years, the OBBBA changes the math. And for high-net-worth households, this could mean rethinking your timing, your giving vehicles, and even your trust documents.
Higher Standard Deduction — Effective 2025
· Single: $15,750
· Married filing jointly: $31,500
A higher standard deduction means fewer people will itemize deductions, which is the only way to claim most charitable contributions. If you usually give small amounts every year, you may no longer get a tax benefit from that pattern.
⚠️ Why this matters: Your giving might still be meaningful, but it won’t automatically lower your taxes unless you exceed the standard deduction threshold.
💡 Smart move: Use charitable “bunching” — make larger donations in some years and less in others so that, in those giving years, your deductions exceed the standard deduction and you can itemize.
New Above-the-Line Deduction for Everyone — Effective 2026
· Up to $1,000 (single) or $2,000 (joint) for cash gifts to public charities.
· Doesn’t apply to DAFs, private foundations, or supporting organizations.
⚠️ Why this matters: Even if you don’t itemize, you can still deduct modest gifts directly to operating charities. This is a win for smaller donors — but not a game-changer for high-capacity donors who give larger amounts or use DAFs.
💡Smart move: If you’re a larger donor, read on for strategies that help you give AND improve your taxes.
For ‘Itemizers’ - there is a new 0.5% AGI “Floor” on Charitable Deductions — Effective 2026
If you DO itemize your deductions, meaning, your total schedule A deductions are more than $15,750 (single) or $31,500 (married) – starting in 2026 you can only deduct charitable contributions above 0.5% of your Adjusted Gross Income (AGI).
Example: If your AGI is $400,000, the first $2,000 you give each year gets no deduction. You only deduct the amount above that threshold.
⚠️ Why this matters: This hits routine small giving the hardest. For high-net-worth donors, it makes sense to consolidate gifts into fewer, larger years to clear the floor and get the maximum benefit.
💡Smart moves: Donor Advised Funds work great for this – bunch your gifts, get the max deduction, then take your time choosing the philanthropies that are near and dear to your heart. Additionally, DAF funds can be invested, and as they grow, you have even more to give! (although, you only get the one-time tax deduction when you contribute funds).
High-Income Deduction Value Cap — Effective 2026
If you’re in the top 37% tax bracket, the tax value of your charitable deduction will be capped at the 35% bracket rate.
⚠️ Why this matters: You can still deduct the full dollar amount you give, but the tax savings are slightly reduced.
💡 Smart move: Time large DAF contributions during high-income years when you can still lock in higher total deduction amounts.
Given changes, what are possible Strategies for Charitable Giving?
📆 Plan Your Giving Early — Don’t Wait Until December
The days of waiting until year-end to make decisions are over. The new AGI floor, higher standard deduction, and income caps make timing critical. Work with your advisor early in the year to map out when and how much you’ll give.
🍇 Use Charitable Bunching
If you normally give $10,000 every year, consider giving $30,000 every three years instead. This way, you can exceed the standard deduction in those years and itemize. In the in-between years, you take the standard deduction.
🎯 Leverage Donor-Advised Funds Strategically
· Make large contributions to a DAF in a high-income year.
· Deduct the full amount now, and grant to charities over time.
· Combine with direct cash gifts to operating charities for maximum flexibility.
📜 Review Your Trust Documents
If you have a trust, make sure it authorizes charitable giving. This can allow the trust itself to make deductible contributions, which may be simpler and more tax-efficient than giving through your individual return.
〰️ The Bottom Line
The OBBBA doesn’t eliminate the benefits of charitable giving — it just changes the rules of the game. For high-net-worth donors, the opportunities are still there, but they require more planning, bigger-picture thinking, and early action.
At Green Bee Advisory/SMB Financial Strategies, we help clients design tax-smart giving strategies that align with both their philanthropic goals and their financial well-being. Whether it’s deciding when to give, how to use a Donor-Advised Fund, or structuring your trust for charitable flexibility, we can help you make the most of the new rules.
Got more questions? Check out our Tax Strategy Resources for high-earning women.
🐝 Frequently Asked Questions about the One Big Beautiful Bill Act (OBBBA)
The OBBBA is a major tax law passed in July 2025 that updates deductions, credits, and estate rules. It touches everything from charitable giving and itemized deductions to estate tax exemptions and clean-energy credits.
Most updates start in 2026, but a few—like the electric-vehicle credit phaseout—kick in sooner. The law extends through 2029 for some provisions, so timing matters when you make big financial moves.
If you itemize, only donations above 0.5% of your AGI count. High earners also face a 35% deduction cap. For non-itemizers, there’s now an “above-the-line” deduction—$1,000 single, $2,000 joint—for cash gifts to public charities.
Try charitable bunching—group several years of giving into one to exceed the standard deduction threshold. Combine that with a Donor-Advised Fund to stay flexible and tax-smart.
📅 Ready to adjust your tax or giving strategy for 2025–2026?
Let’s create a plan that makes the most of your generosity and keeps your taxes in check. Schedule your strategy session here.