Recent legislation offers planning opportunities for proactive investors.

A landmark shift in U.S. financial policy is here. On July 4, 2025, President Trump signed the 'One Big Beautiful Bill Act' (OBBBA) into law, ushering in significant changes designed to prevent tax increases and boost economic growth. Ultimately, none of that matters more than what this comprehensive legislation truly mean for your personal financial planning and wealth management strategy?

The key to a good and proactive financial planning process is it serves as the bedrock of stability amid unknown change. At OneDigital, we're here to help you understand these changes and ensure your financial plan is not just resilient but optimized for the opportunities ahead.

Let’s take a look at some of those most noteworthy providing in the bill and what it could mean for you:

Your Taxes: Stability and New Opportunities

One of the most significant aspects of the OBBBA is the permanent extension of the individual tax rates and brackets from the 2017 Tax Cuts and Jobs Act (TCJA). This provides welcome long-term clarity, allowing you to plan your income taxes with greater certainty. The standard deduction amounts are also increased and made permanent, benefiting many taxpayers.

Beyond permanence, the bill introduces some temporary new deductions (2025-2028) that could put more money in your pocket:

• Tips: If you're a tipped worker, you can exempt up to $25,000 in tips annually (with income phase-outs).
• Overtime Pay: Individuals earning overtime can deduct up to $12,500 ($25,000 for couples) of their overtime earnings (with income phase-outs).
• U.S.-Assembled Auto Loan Interest: A deduction of up to $10,000 per year is available for interest on loans for U.S.-assembled cars purchased during this period.
• Senior Bonus Deduction: Most seniors with modified adjusted gross incomes below $75,000 ($150,000 for couples) can receive a $6,000 annual deduction, largely eliminating federal taxes on Social Security benefits for these years.¹

What this means for you: These temporary deductions offer a valuable four-year window to reduce your taxable income. This opportunity may open the opportunity for advanced planning tactics like managing capital gains in your portfolio or ROTH conversions. We can help you identify if you qualify and ensure you're considering these potential benefits.

Your Legacy: Unprecedented Estate Planning Clarity

For those focused on wealth transfer and legacy planning, the OBBBA delivers a monumental change: a permanent increase in the federal estate and gift tax exemption. Starting January 1, 2026, this exemption rises to $15 million per individual, or $30 million for married couples. This is a significant jump from previous levels and will be indexed for inflation annually.²

Even more importantly, the bill explicitly states there will be no "clawback" if the exemption is reduced by a future Congress after you've utilized it.

What this means for you: This is a golden opportunity for high-net-worth individuals to engage in accelerated lifetime gifting with confidence. You can transfer substantial wealth out of your taxable estate, securing your legacy without federal gift tax concerns. If you have an existing estate plan, it's absolutely critical to review and update it to leverage these new, higher thresholds and ensure it aligns with your long-term goals. Remember, state-level estate taxes still apply, so coordination is key.

Your Investments: Navigating a Dynamic Landscape

The OBBBA also brings shifts that could influence your investment portfolio. While the bill aims for growth, there are differing projections on national debt and interest rates from government agencies. This means your financial plan must be resilient across various economic scenarios, emphasizing diversified portfolios to navigate potential volatility. Broader market changes, including shifts in policy towards certain sectors and new economic outlooks, underscore the importance of a well-diversified and adaptable investment strategy.

What this means for you: We'll work with you to analyze your current investment mix. This involves ensuring your portfolio is well-diversified and aligned with your long-term goals, taking into account the broader economic and policy shifts brought about by the OBBBA. Our focus is on building a resilient portfolio that can adapt to changing market conditions, rather than predicting specific market movements.

Your Next Steps with OneDigital

The One Big Beautiful Bill Act is complex, but its core message for wealth management clients is clear: proactive planning is paramount.

Just as your OneDigital advisors are proactively analyzing these changes, we encourage you to take a proactive approach to your financial future. We are committed to helping you navigate this new landscape. We recommend you consider:

• Optimizing Your Tax Strategy: We can help identify opportunities to maximize new temporary deductions and your charitable giving is tax-efficient.
• Updating Your Estate Plan: This is a critical time to review and potentially revise your estate planning strategies to take full advantage of increased federal exemptions and the "no clawback" provision.
• Assessing Your Investment Portfolio: We'll evaluate your current asset allocation in light of new economic and industry-specific realities, making adjustments as necessary to align with your goals.

The OBBBA presents both challenges and significant opportunities. By taking a proactive and informed approach with OneDigital, we can align your financial plan to serve your long-term goals and help secure your financial future.

Looking for a more proactive approach to your wealth management? Reach out to OneDigital for a second opinion on how the OBBBA impacts your financial plan.

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Investment advice offered through OneDigital Investment Advisors LLC.
OneDigital and our associates cannot provide tax or legal advice. Any tax or legal information provided is for information and educational purposes only. Please review those details with your tax and legal professionals to review your specific circumstances.

1 https://www.statesman.com/story/business/2025/07/16/no-tax-on-tips-bill-when-effect-trump-big-beautiful-bill/85241174007/
2 https://www.clearygottlieb.com/news-and-insights/publication-listing/one-big-beautiful-bill-act-tax-provisions-of-note-for-individuals#:~:text=In%202026%2C%20the%20federal%20gift,permanent%E2%80%9D%20and%20do%20not%20sunset

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