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One Big Beautiful Bill Act (OBBBA): A Comprehensive Tax Reform

Big tax changes are coming—but with the right planning, they could work in your favor.

OBBBA builds on the 2017 Tax Cuts and Jobs Act (TCJA) by making key provisions permanent, updating existing rules, and introducing new deductions. This legislation aims to simplify taxes and provide financial benefits for individuals, families, and businesses.

At Davis Capital Management, we help individuals and families create personalized, tax-smart retirement plans that align with their goals and values. Here’s how the OBBBA affects your taxes:

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We turn tax changes into long-term advantages that ARe personalized to your goals.

1. Permanent Tax Brackets & Deductions

The TCJA tax rates (10%–37%) stay in place, along with the increased standard deductions:

  • Married filing jointly: $31,500
  • Head of household: $23,625
  • Single: $15,750

 

Permanent rates mean more room to plan with purpose. 

2. Child & Mortgage Benefits Locked In

  • Child Tax Credit: Now permanently $2,200 per child.

  • Mortgage interest deduction: Still capped at $750K and includes mortgage insurance starting in 2026.

 

Optimize your filing status and mortgage strategy now to maximize family-focused tax benefits.

3. Estate & AMT Updates

  • Estate tax exemption set at $15M ($30M for couples).

  • AMT exemptions increased permanently, easing tax complexity.

 

Now’s the time to review your estate plan and ensure your assets pass tax-efficiently. 

4. Small Business Support

  • Section 199A (QBI deduction): Extended with higher thresholds.

  • Bonus depreciation returns to 100% for certain purchases.

  • Section 179 limit raised to $2.5M.

 

Take advantage of extended deductions to reinvest, grow, and reduce your business’s tax burden.

New & Notable Deductions (2025–2028)

The OBBBA adds several targeted tax breaks:

  • Seniors: $6,000 deduction for those 65+ (income-based phaseouts apply).
  • Tip Income: Deduct up to $25,000 for cash tips.
  • Overtime: Deduct up to $12,500 (or $25,000 for joint filers).
  • Trump Accounts: Tax-deferred savings for kids under 18 with $5,000/year contribution cap.
  • Charitable Giving: $1,000 deduction for non-itemizers starting in 2026.
  • Car Loan Interest: Up to $10,000/year on U.S.-assembled vehicles.

 

 

What's Changing or Going Away

  • SALT Deduction Cap increases to $40,000 in 2025 (phased reduction for high earners).
  • Clean Energy Credits: Phasing out by mid-2026.
  • Gambling Losses: Capped at 90% of winnings starting in 2026.

Tax law is evolving—but with the right planning, it could work in your favor.

Let’s talk about how these changes could support your long-term goals.

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