What the “One Big Beautiful Bill” Means for Individuals and Businesses

On July 4, 2025, Congress passed the sweeping One Big Beautiful Bill Act (OBBBA)—a major overhaul of U.S. tax policy that marks one of the most significant tax reform efforts in recent years. With several key provisions now made permanent, high net worth individuals and privately held businesses are entering a new era of tax planning. The legislation brings sweeping changes to estate planning, business deductions, and investment incentives, which requires a fresh look at existing strategies. 

Key Impacts on High Net Worth Individuals

One of the most notable changes is the permanent increase of the federal estate and gift tax exemption to $15 million per person, indexed for inflation starting in 2026. This increase replaces the previously scheduled drop to approximately $7 million per person and provides expanded opportunities for wealth transfer planning. For wealthy families, this change offers: 

• More flexibility in lifetime gifting strategies. 

• Reduced exposure to estate taxes, especially for estates between $15 and $30 million. 

• An extended window for trust and asset restructuring. 

Action Items:

• Reevaluate gifting strategies. Individuals who previously exhausted their exemptions now have additional capacity to gift assets tax-free. 

• Review and update estate plans. Trusts, family partnerships, and other structures should be reassessed to ensure they align with the new exemption levels. 

• Explore generational wealth transfers. With higher thresholds, families have more flexibility to pass on wealth while minimizing tax exposure. 

Key Impacts on Mid-to-Large Privately Held Businesses

OBBBA also includes several pro-business tax provisions designed to encourage investment and growth: 

• Permanent 20% Deduction for Pass-Through Income (Section 199A): Owners of S corporations, partnerships, and LLCs can continue to deduct 20% of qualified business income, offering significant annual tax savings. 

• Full Expensing of Capital Investments: Businesses can immediately deduct 100% of the cost of new equipment, technology, and even certain real estate through 2031—removing previous phase-down limitations and simplifying long-term planning. 

• Expanded Business Interest Deductions: The bill reinstates a more generous EBITDA-based cap for deducting business interest expenses, helping capital-intensive firms optimize their financing structures. 

• Enhanced R&D Expensing: Companies can now fully expense domestic R&D costs in the year they’re incurred, improving cash flow and incentivizing innovation. 

Action Items:

• Leverage full expensing. Businesses should consider accelerating capital purchases to take advantage of 100% bonus depreciation on equipment, machinery, and certain real estate. 

• Maximize pass-through income deductions. Owners of S corps, partnerships, and LLCs should work with advisors to structure income in a way that qualifies for the full 20% Section 199A deduction. 

• Restructure financing where needed. With expanded interest deductibility, companies may want to revisit borrowing strategies or refinance existing debt. 

• Invest in R&D. Immediate expensing of domestic research and development costs creates an incentive to increase innovation and tech investment. 

As with any significant new legislation, applying a high-level understanding of the law to your specific situation is important to sound decision-making. Whether optimizing a legacy plan or accelerating business investment, thoughtful preparation now will pay off in both tax savings and peace of mind. Coordinate with your financial, tax, and legal advisors to review your current plan and adjust accordingly. OBBA offers long-term planning stability—but also a short window for proactive decision-making. The sooner you act, the more opportunity you can capture. 

For a quick reference guide on the significant tax changes in the OBBBA, download our New Tax Law Brings Major Changes one sheet.