A Generational Shift in Tax Planning

The most sweeping tax legislation in decades has just passed—and if you’re not paying attention, it could cost you tens (or even hundreds) of thousands in missed opportunities. Nicknamed the “One Big Beautiful Bill”, this 870-page reform package reshapes the financial landscape for high-income earners, business owners, and wealthy families.

Let’s break down what changed, who benefits, and what actions you should be taking now before these windows close.

1. Individual Tax Cuts Are Now Permanent
The bill locks in the 2017 Tax Cuts and Jobs Act brackets, permanently capping the top marginal rate at 37%—a critical win for those earning $500K+ annually. Without this change, the rate would have reverted to 39.6% in 2026, costing top earners tens of thousands yearly.

Action Tip:
If you’re a W-2 executive or professional, reevaluate 401(k) timing, deferred comp plans, or Roth conversion opportunities. Lock in savings now.

2. AMT Relief + Estate Tax Exemption Boost
For high earners, the Alternative Minimum Tax (AMT) has been a silent penalty—especially for those with RSUs or ISO exercises. This bill extends the AMT exemption, protecting more income.

Even more impactful:

The estate tax exemption jumps to $15M per individual / $30M per couple, indexed to inflation.

Previously scheduled to fall dramatically in 2026, this change offers a massive window for legacy planning.

Action Tip:
Now is the time to revisit trust structures, gifting strategies, and family LLCs. Don’t wait for the sunset.

3. Expanded Benefits for Families + Multigenerational Planning
This bill also helps the next generation and retirees:

Child Tax Credit: Raised to $2,200 per child, now inflation-indexed.

“Trump Account”: New savings vehicle for babies born 2024–2028. $1,000 federal seed + $5,000 annual contribution, tax-free growth, flexible for education, homeownership, or retirement.

Senior Bonus Deduction: An extra $6,000 standard deduction for taxpayers 65+, valid through 2028.

Action Tip:
Plan for intergenerational wealth: integrate child or grandchild planning into your family trust and funding structures.

4. SALT Deduction Cap Temporarily Raised
Residents of high-tax states (CA, NY, NJ, IL, etc.), rejoice. The SALT deduction cap was increased from $10K → $40K, offering substantial relief for property and income tax filers.

However, it phases out for AGI above $500K and expires in 2029.

Action Tip:
Work with your CPA to bunch property tax payments or accelerate deductible items in high-income years.

5. Permanent 20% QBI Deduction for Business Owners
A huge win for LLCs, S-Corps, and partnerships—the 20% deduction on Qualified Business Income (QBI) is now permanent. Previously set to expire, this benefits:

Consultants

Medical professionals

Attorneys

Founders with pass-through entities

Thresholds have also relaxed, allowing more high-income service pros to qualify.

Action Tip:
Revisit your entity structure, and consider wage splits or business line separation to qualify more income for QBI.

6. 100% Bonus Depreciation + Expensing Is Back
For business owners, big purchases just got a lot more rewarding:

100% bonus depreciation is reinstated permanently.

Section 179 expensing increased to $2.5M.

This means you can deduct vehicles, equipment, furniture, and even some real estate improvements all in year one.

Action Tip:
Time your purchases strategically. This is one of the biggest levers to improve cash flow in 2025.

7. R&D and Interest Deduction Improvements
For tech-forward or capital-intensive businesses, this bill reverses burdensome limitations:

R&D costs now fully deductible in year 1

Interest deduction formula shifts back to EBITDA vs. EBIT

Action Tip:
Capitalize on innovation: if you’re developing software, hardware, or proprietary systems, this is a major deduction upgrade.

8. QSBS Enhancements for Founders + Angel Investors
Qualified Small Business Stock (QSBS) just became a goldmine:

50% gain exclusion after 3 years

75% after 4 years

100% after 5 years

Exclusion cap rises from $10M → $15M

Action Tip:
Founders: structure your equity for tax-free exits. Angels: get strategic with cap tables and holding periods.

Conclusion: Don’t Wait Until Filing Season
This bill rewrites the rules for high-income professionals, executives, and business owners. But many of the benefits come from proactive planning—not tax filing.

At Tailored Wealth, we help clients translate legislation into leverage. From trust updates to entity structuring, our team aligns your wealth with your goals and helps you keep more of what you’ve earned.

Watch the Full Breakdown on YouTube:

 

Bonus Tool: Try our Wealth Resilience Scorecard to see where you stand under the new law.