OBBBA: Taxes and Estate Planning

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The first half of 2025 was filled with reports of what legislation would pass with a new presidential administration. While discussion continues regarding certain items, July’s passing of H.R. 1 (formerly known as the “One Big Beautiful Bill Act”) has locked in some significant new policies everyone should be aware of when building their financial plans. For those approaching or already enjoying retirement, there are some specific provisions that may be pertinent.

This post, the first of two about H.R. 1, covers the tax and estate planning sections of the bill and how they might affect your clients’ retirement plans.

Taxes

The new bill permanently extends the standard deduction first introduced in the 2018 Tax Cuts and Jobs Act. It also provides an extra $750 to the standard deduction for single taxpayers and $1,500 for married couples in 2025, adjusting those amounts for inflation yearly beginning in 20261.

The bill also adds an additional $6,000 deduction per individual for taxpayers 65 or older. This new deduction supplements a preexisting addition to the standard deduction for seniors of $2,000 for single filers and $1,600 per qualifying individual for married filers1.

For those still in the workforce, the new bill will also limit taxes owed on tips or overtime pay. From 2025-2028, overtime pay covered by the Fair Labor Standards Act qualifies for dollar-for-dollar deductions. In this same timeframe, tips up to $25,000 can qualify for the same dollar-for-dollar deduction. Effective from 2025-2029, the State and Local Tax deduction cap also increases to $40,0002.

  1. https://bipartisanpolicy.org/explainer/the-2025-tax-bill-additional-6000-deduction-for-seniors-simplified/
  2. https://www.hrblock.com/tax-center/irs/tax-law-and-policy/one-big-beautiful-bill-taxes/

Estate Planning

When considering your clients’ estate plans, be aware that the new laws1 state:

  • Gift, estate, and generation-skipping tax exclusion amounts increase to $15 million per individual ($30 million per married couple) and will be indexed for inflation. This increased amount begins for gifts made and estates of decedents dying after December 31, 2025.
  • Those who do not itemize deductions can now claim a charitable tax deduction: $1,000 for individuals and $2,000 for married couples filing jointly.
  • Definitions for qualified educational expenses for students attending elementary and secondary public, private, or religious schools now broaden. Beginning in 2026, the total limit for K-12 education expenses increases from $10,000 to $20,000.
  • New accounts will see the government contribute $1,000 for U.S. citizen children born between December 1, 2025 and December 31, 2028. Accounts can be created for those born outside the window, with up to $5,000 in additional contributions allowed.
  1. https://www.jdsupra.com/legalnews/estate-planning-provisions-in-the-one-6624435/

Savings and investments are common concerns when planning for or living through retirement, but it’s also important to consider any estate or legacy one wishes to pass on to family and loved ones. Educating yourself on all options is a great way to help clients create a plan best aligned with their goals.

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Stephen Odom, CEO of The Impact Partnership

STEPHEN ODOM

Chief Executive Officer

Stephen started in the insurance marketing business in 2001 as a new business consultant. In 2002 he was promoted to Director of Sales and built a 200 million book of business from scratch. By 2005, he was one of the top wholesalers in the country, working with some of the top financial advisors and insurance agents across the USA. In 2008, Stephen was promoted to Co-President of one of the largest IMOs in the country.

In 2011, Stephen continued his entrepreneurship path and co-founded The Impact Partnership, an INC 5000 company. Stephen is responsible for the strategic vision of Impact and is laser-focused on creating a culture of growth for both internal teammates and our amazing customers.

Stephen lives in Kennesaw, GA, with his wife of more than 20 years, Kendra. They are blessed with three beautiful children Katie, Tyler, Anna Brooke, and Laya, their German Shepherd and Luna, their BernieDoodle.