Last updated: September 29, 2025
Introduction
The One Big Beautiful Bill is now law. For executives and business owners, these 2025 tax law changes are the biggest shift in years. Some provisions are permanent; others are temporary windows that reward proactive planning. Here’s what matters, and how to act.
Key Provisions of the 2025 Tax Law
Permanent Extension of 2017 Tax Cuts
The top marginal rate stays at 37% instead of reverting higher. For a W-2 executive earning $800K, that’s roughly $16K/year in savings, or $160K over a decade (before any surtaxes or phase-outs).
QBI Deduction Enhanced
Pass-through owners (S corps, partnerships, certain sole props) see the QBI deduction made permanent, with an increase to 23% starting in 2026 and wider phase-in thresholds. Entity design and reasonable comp matter more than ever.
Estate Exemption Expansion (from 2026)
Beginning 2026, the federal lifetime estate/gift/GSST exemption rises to $15M per person ($30M per couple), indexed thereafter. This is a bigger runway for lifetime gifts, SLATs, and trust design.
SALT Deduction Boost (temporary)
The State and Local Tax cap increases from $10K → $40K through 2029, with phase-outs at higher incomes. Smart timing of property and state estimated payments could unlock meaningful deductions.
100% Bonus Depreciation & Higher Section 179
Full expensing returns. Section 179 limits also jump (up to $2.5M). If you’re planning major equipment or technology upgrades, aligning purchases with your income calendar can meaningfully improve cash flow.
“Trump Accounts” for Newborns (2025–2028 births)
Each eligible child receives a $1,000 federal deposit at birth; parents may contribute up to $5,000/year. Growth is tax-free and funds can be used for education, a first home, or retirement.
QSBS Enhancements
Higher exclusion percentages and a larger lifetime cap strengthen Section 1202 QSBS planning for founders, early employees, and angel investors.
Extra Deduction for Seniors (through 2028)
Those age 65+ receive an additional $6,000 standard deduction, useful in multigenerational planning if you support parents.
Why This Matters for Executives & Owners
Permanent rate clarity + targeted deductions = more predictable after-tax planning. Estate strategies no longer face a 2026 “cliff,” while business owners can synchronize capex, compensation, and entity structure for better outcomes. Some benefits sunset, missing the window can be a six-figure mistake.
What To Do Now
- Model 2025 vs. 2026 income (deferred comp, RSUs/ISOs, bonuses) to optimize timing.
- Reevaluate entity structure to maximize QBI and align reasonable comp.
- Refresh estate plan (trusts, gifts, SLATs, powers) ahead of 2026 exemption shift.
- Time large purchases to capture 100% bonus depreciation/Section 179 expensing.
- Coordinate SALT payments with your state planner, conformity varies.
Deep Dive Video
Key Takeaways
- Top rate stays 37%; QBI and SALT get more generous (with limits).
- Estate exemption increases to $15M per person in 2026, plan gifts early.
- 100% bonus depreciation + higher 179 = stronger cash-flow levers for owners.
- Some provisions sunset, your timing drives your tax outcome.
FAQs
What are the biggest wins for high earners?
Permanently lower rates, SALT cap relief (subject to phase-outs), and better alignment of equity/bonus income with deductions. Owners also benefit from restored full expensing and higher Section 179.
How does the SALT change affect me in a high-tax state?
The cap rises to $40K through 2029 for many filers, but benefits phase out at higher incomes. Annual planning around property and estimated payments matters.
What changes for estate planning in 2026?
The federal exemption increases to $15M per person ($30M per couple), indexed. Review lifetime gifting and trust structures now so you’re positioned ahead of 2026.
What should pass-through owners do about QBI?
Confirm entity structure, reasonable compensation, and aggregation elections. The 23% QBI rate from 2026 increases the value of fine-tuning these levers.
How can Tailored Wealth help?
We build a coordinated plan, income timing, entity structure, estate design, and investment tax strategy, so you capture today’s opportunities and avoid tomorrow’s regrets.