OBBBA, explained the way it actually affects your taxes. Not the headlines. The provisions.

What OBBBA Is (And Why It's the Biggest Tax Bill Since TCJA)

The One Big Beautiful Bill Act — OBBBA for short, or just "the Big Beautiful Bill" if you've been reading the news — is a federal tax + spending statute passed by the 119th Congress and signed into law by President Trump on July 4, 2025. It's the largest tax legislation since the Tax Cuts and Jobs Act of 2017, and it does three big things at once:

• Makes permanent the most important TCJA provisions that were scheduled to sunset at the end of 2025 — the individual tax brackets, the 20% QBI deduction, the elevated standard deduction, and the doubled estate tax exemption.
• Restores and expands several business-side provisions — most notably 100% bonus depreciation (which had been phasing out) and §179 expensing thresholds.
• Creates entirely new deductions — a $25K tip income deduction, a $12.5K overtime deduction, a $10K auto loan interest deduction, a $6K senior deduction, and a brand-new $1K-seeded Trump Account savings vehicle for kids.

The CBO scored the bill at $2.4–$2.8 trillion of additional federal debt over ten years. That's the trade. The provisions are real, and most of them are good for our clients. The fiscal math is somebody else's problem.

Why this matters operationally, not just politically

From a tax-planning seat, OBBBA's most important feature is permanence. For the past two years, ETS clients have been making decisions under a sunset cloud: "Should I do the S-corp election now if QBI might disappear at the end of 2025?" "Should I rush gifts before the estate exemption gets cut in half?" "Should I buy that piece of equipment before bonus depreciation drops to 20%?" Most of those sunset cliffs are gone. The strategy work shifts from "race the clock" to "optimize for the long run."

Why most CPAs will be playing catch-up

Just so you know — the average generalist CPA hasn't read the full bill. They're working from CPE summary slides + IRS press releases. The provisions that show up in early 2026 returns will get filed correctly. The provisions that require planning before December 31, 2025 (year-end bonus depreciation acquisitions, charitable bunching ahead of the 2026 0.5% AGI floor, SEP-IRA contributions calibrated to the new QBI math) are the ones that get missed. We've been working these into plans since July.

How to use this guide

The article cluster at the bottom of this page has a dedicated deep-dive for every major OBBBA provision. Read this pillar end-to-end first for the lay-of-the-land. Then drop into the specific articles for the provisions that apply to you. If you want to skip to the math for your specific situation — book a Discovery and we'll do that in 15 minutes.

The 4 Categories of OBBBA Changes

OBBBA's provisions split cleanly into four buckets. Knowing which bucket(s) you fall into tells you which articles in the cluster matter most for your situation.

Category 1 — Business + pass-through owners

The biggest dollar moves in OBBBA are on the business side. Permanent QBI, permanent 100% bonus depreciation, and expanded §179 expensing thresholds together make this the most consequential business-tax legislation since TCJA. If you own an S-corp, an LLC, a Schedule C, or a multi-owner partnership, this category is where the money is.

Category 2 — Individual + family

For high earners and parents, OBBBA delivers the SALT cap raised to $40K (through 2029), the child tax credit bumped to $2,200/child with inflation indexing, the $15M estate exemption permanently locked in, and new charitable giving rules that materially change the 2025 bunching calculus.

Category 3 — Workers (tipped, hourly, low-and-mid income)

The campaign-promise provisions — "no tax on tips" ($25K deduction), "no tax on overtime" ($12.5K deduction), the new auto loan interest deduction ($10K), and the $6K senior deduction — all live here. All four are temporary, all four sunset in 2028 unless extended, and all four have meaningful phase-outs and qualification rules that get glossed over in headlines.

Category 4 — Retirement, savings, and the new Trump Accounts

OBBBA introduced an entirely new tax-advantaged savings vehicle — the Trump Account — for children born 2025-2028. $1,000 federal seed. $5,000/year contribution limit. Locked until 18, then converts to a Traditional IRA. For new parents and grandparents, this is a planning conversation that didn't exist in 2024.

Who's Most Affected by OBBBA

Look — OBBBA touched almost every category of taxpayer. But four groups feel it most acutely. Here's the priority order we use when triaging client situations.

Real estate investors with $400K+ properties

The single biggest dollar move in OBBBA is permanent 100% bonus depreciation on cost-segregated property components. The phase-down that was running (40% in 2025, 20% in 2026, 0% by 2027) is dead for property acquired after January 19, 2025. Pair that with the STR loophole (material participation in a short-term rental), and a cost seg study on a $700K STR can drive $150K–$220K of first-year deductions. We've already restructured 11 client engagements around this since July.

S-corp owners and 1099 contractors at the QBI threshold

The 20% QBI deduction was set to vanish at the end of 2025. It's now permanent. Plus the phase-out thresholds bumped to $247,300 single / $494,600 MFJ for 2025. If your QBI was getting clipped under the old thresholds, run the math again — you may have recovered some or all of the deduction without doing anything. For S-corp owners, this also means the years-long uncertainty about whether to elect is over. The election is durable. Plan accordingly.

High-income households in high-property-tax counties

If your prior return was hitting the $10K SALT cap (common in Bexar, Travis, Williamson, Harris, and Dallas counties on $500K+ homes), the cap quadrupled to $40K through 2029. That's potentially $25K–$30K of recovered itemized deduction per year, depending on your property tax + state income tax stack. For households above $500K AGI the cap phases back down, but most of our ETS clients sit below the phase-out and get the full benefit.

Parents of kids born 2025-2028

Trump Accounts are a new planning lane. $1,000 federal seed is automatic. $5,000/year of additional contributions are allowed from parents, grandparents, or even the parent's employer (up to $2,500/year as a tax-free fringe benefit). Locked until 18, then converts to a Traditional IRA. For families with kids in this window, this is a setup conversation we run on every Discovery — it slots in alongside 529s, UGMA/UTMAs, and Roth IRA-for-kids strategies.

Key Permanent Provisions (The Sunset Clouds Are Gone)

The provisions in this section are permanent — no sunset date, no scheduled phase-out. They form the durable planning baseline for the next decade-plus, unless Congress changes the law again.

Permanent 20% QBI deduction (Section 199A)

Pass-through business owners — sole props, partnerships, S-corp shareholders — can deduct 20% of qualified business income on their personal return. The deduction effectively drops the federal marginal rate on business income from 37% down to about 29.6% for owners who fully qualify. Originally scheduled to sunset 12/31/2025 — OBBBA made it permanent and bumped 2025 phase-out thresholds to $247,300 single / $494,600 MFJ. A new $400 minimum deduction floor kicks in for taxpayers with $1,000+ of aggregate QBI from active trades or businesses.

Permanent 100% bonus depreciation (Section 168(k))

For property with a recovery period of 20 years or less — equipment, vehicles, furniture, the personal-property buckets inside a cost segregation study — the full cost is deductible in the year placed in service. Permanent. No phase-down. Applies to property acquired after January 19, 2025. This single provision restored the headline tax move of the decade for real estate investors and equipment-heavy businesses.

The transition rule matters: property acquired before January 19, 2025 stays on the phase-down schedule (40% bonus for 2025 placements, 20% for 2026, 0% by 2027). Property acquired on or after January 19, 2025 gets the permanent 100%. The "acquired" date is generally the contract or binding-commitment date — not the placed-in-service date. For real estate investors with closings straddling that window, the contract date can be the difference between a $50K deduction and a $200K deduction on the same property.

Permanent $15M estate + gift tax exemption

Before OBBBA, the federal estate + gift exemption was $13.99M per individual (2025) but scheduled to revert to roughly $7M on January 1, 2026 (TCJA sunset). OBBBA permanently raised it to $15 million per individual ($30 million per married couple) effective January 1, 2026, with continued annual inflation adjustments. The "rush to gift before the exemption drops" pressure that dominated 2024-2025 estate planning is gone.

Permanent $2,200 child tax credit (with inflation indexing from 2026)

The TCJA-era $2,000 credit was scheduled to revert to $1,000 at end of 2025. OBBBA made it permanent at $2,200 per qualifying child starting tax year 2025 and indexed it for inflation beginning 2026. $1,700 maximum refundable. Income phase-outs stay at $200K single / $400K MFJ. The new wrinkle: both the child AND the taxpayer claiming the credit now need valid SSNs (previously the taxpayer could use an ITIN).

Time-Bound Provisions (Windows That Close in 2028 or 2030)

These provisions are real and meaningful — but temporary. Plan with the sunset dates in mind. Just so you know, several of them are likely to be extended by future Congresses; we're not betting client plans on that.

Tip income deduction — $25K, expires 2028

Workers in IRS-designated tipped occupations (restaurant servers, bartenders, hotel staff, hairdressers, etc.) can deduct up to $25,000/year of qualified tip income. The tip income still gets reported normally on the W-2 or Schedule C; an offsetting deduction zeros it out for federal income tax. FICA still applies to the underlying tip wages. State income tax in conforming states still applies. Effective 2025, expires end of 2028.

Overtime pay deduction — $12.5K single / $25K joint, expires 2028

Only the "half" portion of time-and-a-half pay qualifies (i.e., if you earn $30 base + $15 overtime premium = $45/hr for overtime, only the $15 premium counts toward the deduction). Phases out above $150K MAGI single / $300K MAGI joint. Reported via a new Schedule 1-A on the 2025 Form 1040 that the IRS created specifically for OBBBA's worker deductions. Effective 2025, expires end of 2028.

Auto loan interest deduction — $10K, expires 2028

Up to $10,000/year of interest on a loan to purchase a qualified personal vehicle is now federally deductible. First time personal auto loan interest has been deductible since the Tax Reform Act of 1986. Vehicle must be personal-use, purchased after the effective date, and the loan secured by the vehicle. Active 2025-2028.

Senior deduction — $6K per qualifying senior, expires 2028

Taxpayers age 65+ get a new $6,000 deduction on top of the existing senior standard deduction add-on ($1,950 single / $1,550 per qualifying spouse MFJ). Married couples both 65+ get $12,000 of the new deduction. Combined with the base standard deduction, the floor for a married 65+ couple becomes ~$45,100 before any taxable income is computed. With income phase-outs. Effective 2025, expires end of 2028.

The SALT Cap Changes (The Political + Practical Impact)

The state and local tax deduction was the most politically contested provision in TCJA. OBBBA didn't repeal the cap — it expanded it dramatically.

The 4× expansion

For tax years 2025-2029, the SALT cap is $40,000 per return (vs $10,000 under TCJA). The cap rises 1% annually through 2029 ($40,400 in 2026, $40,804 in 2027, etc.). The entire expansion reverts to $10,000 in 2030 unless extended. Itemizers in high-property-tax states see meaningful deduction recovery in the 2025-2029 window.

The phase-down above $500K AGI

For filers with AGI above $500,000, the cap phases down at a 30% rate, eventually returning to $10,000 for the highest earners. Most ETS clients sit below this phase-out threshold and get the full $40K cap.

Why this matters for Texans specifically

Texas has no state income tax — so the entire SALT bucket goes to property taxes. For Texans with $400K+ homes, the property tax bill alone often exceeded the old $10K cap. The expanded cap lets you fully deduct your property tax plus things like state sales tax (Texas substitutes sales tax for state income tax in the SALT calculation). This is one of the most underappreciated OBBBA wins for our San Antonio / Bexar County clients.

Pairing with the PTET election for business owners

For S-corp and partnership owners, the pass-through entity tax (PTET) election in conforming states still bypasses the SALT cap entirely for the business's share of state income tax. PTET + the expanded $40K personal SALT cap stacks. We evaluate PTET annually for every multi-state business owner in our client base.

The reversion cliff in 2030

Just so you know — the entire SALT expansion is set to revert to $10,000 on January 1, 2030 unless Congress extends it. That gives high-property-tax households a five-year window of meaningful deduction recovery. Planning moves that take advantage of the expanded cap (timing of property tax payments, charitable bunching against the new SALT room, itemize-vs-standard recalibration) only work during the 2025-2029 window. We're not betting on extensions — we're capturing the value while it exists.

Trump Accounts (The New $1,000 Child Savings Vehicle)

Trump Accounts are the most genuinely new thing in OBBBA. Unlike most provisions which modified existing tax code, this is an entirely new account type.

The $1,000 federal seed

Children born between January 1, 2025 and December 31, 2028 automatically receive a $1,000 federal seed deposit into a Trump Account opened in the child's name. The seed is funded by the Treasury and is non-taxable to the child. Children born outside this window can still open Trump Accounts but don't get the seed.

How contributions work

Anyone — parents, grandparents, employers, nonprofits — can contribute up to $5,000 per year after-tax until the child turns 18. Employers get a special wrinkle: they can contribute up to $2,500/year as a tax-free fringe benefit to the employee's child's Trump Account. That's a brand-new employer benefit design — expect HR departments to start adding this to benefit packages.

Investment rules

Trump Account funds must be invested in mutual funds or ETFs tracking a U.S. stock index. Growth is tax-deferred. Funds are locked until the child turns 18, at which point the account converts to a Traditional IRA in the child's name. From there, normal IRA rules apply.

Trump Accounts vs 529 plans vs UGMA/UTMA

A 529 is education-restricted and offers state tax deductions in many states. A UGMA/UTMA is fully flexible but the kid gets unfettered access at the age of majority (18 or 21 depending on state). Trump Accounts sit in between — federally seeded, retirement-style lock-up, eventually becomes the kid's retirement nest egg. We're recommending Trump Accounts as a complement to (not replacement for) 529s for ETS clients with young kids.

When the program goes live

Account contributions begin July 4, 2026 (one-year anniversary of the bill signing). The $1,000 federal seed is retroactive to births starting January 1, 2025. Children born in 2025 will get their seed deposited when the program opens. Plan accordingly.

What ETS Clients Are Actually Doing About OBBBA

Look — this section is the real value of this pillar. Plenty of CPAs can recite the provisions. We've been working OBBBA into client plans since July 2025. Here's what's actually moving the needle.

Move 1 — Bonus depreciation acceleration on Q4 2025 + 2026 property buys

Real estate investors with capacity to close are accelerating acquisitions. A $700K STR with 25% cost-seg-eligible personal property = $175K of first-year bonus depreciation. Combined with material participation in the rental (the STR loophole), that can offset W-2 income for high-earner spouses. We're running this play for 9 active clients right now and have 4 more queued for early 2026.

Move 2 — S-corp QBI permanence triggering deferred conversions

Several ETS clients had been holding off on the S-corp election because QBI was scheduled to sunset. That sunset is gone. We've reopened 6 LLC → S-corp conversion conversations that had been parked. The math now justifies conversion for a wider range of income levels because the QBI deduction is durable.

Move 3 — SALT recovery for Texas property owners with $400K+ homes

The expanded $40K SALT cap means most of our Bexar / Travis / Williamson clients with $500K-$1.5M homes are now fully deducting their property tax (which was getting capped at $10K). For 2025 returns, this is ~$5K-$15K of recovered itemized deduction per household. Easy win, zero planning required — but only if your return is set up to itemize, which the post-TCJA standard deduction often beats.

Move 4 — Trump Account setup for new parents

Every client with a 2025 birth or expected 2026 birth gets the Trump Account conversation on their next touchbase. The $1,000 federal seed is automatic; the planning conversation is about whether to layer additional contributions, whether to coordinate with grandparents, and whether to ask the employer about the $2,500 fringe benefit.

Move 5 — Charitable bunching in 2025 ahead of the 2026 0.5% AGI floor

For high-income donors, the 2026 changes to charitable giving (new 0.5% AGI floor + 35% cap at top bracket) made 2025 a critical bunching year. We ran bunching analyses for every high-income philanthropic client in Q3-Q4 2025. Donor-advised funds accelerated. 5-year giving plans front-loaded into 2025. The 2026 charitable landscape will be less generous for top-bracket donors.

Move 6 — Senior client itemization re-checks

The new $6K senior deduction (plus the existing $1,950 senior add-on) materially shifts the standard-vs-itemize math for ETS clients age 65+. We're re-running the comparison on every senior client's return for 2025 — several who had been itemizing for years will now win on standard.

Move 7 — Restaurant + service-industry clients claiming the tip deduction correctly

The $25K tip deduction is real, but the qualification rules are tighter than the headlines suggest. The worker must be in an IRS-designated tipped occupation, the tips must be properly reported (W-2 box 7 for employees, Schedule C for self-employed), and the deduction is claimed via the new Schedule 1-A on Form 1040. We've already coached three restaurant-owner clients on how to set up their W-2 reporting so their tipped staff can claim the deduction without scrambling at year-end.

Move 8 — Charitable strategy redesign for 2026 and forward

For high-income philanthropic clients, the 2026 charitable rule changes mean the old "bunch every other year" strategy needs an update. The new 0.5% AGI floor means small gifts get clipped; the 35% benefit cap at the 37% bracket means top-bracket donors lose 2 cents of deduction value per dollar given. Donor-advised funds, qualified charitable distributions from IRAs (for age 70½+ clients), and direct stock-gifting strategies all need re-modeling for 2026+.

What This Doesn't Cover (Honest Scope Note)

OBBBA is a 900+ page statute. This pillar covers the provisions that move the needle for ETS clients. There are real provisions we haven't covered here because they affect very narrow taxpayer populations or because IRS implementation guidance is still pending. Just so you know what's out of scope:

• Manufacturing-specific credits (CHIPS-adjacent provisions, advanced manufacturing investment credit changes) — relevant for industrial clients, niche to our book.
• Agricultural deductions + farmer-specific provisions — relevant for farm clients, niche to our book.
• International tax provisions (GILTI, FDII, BEAT adjustments) — relevant for multinational corporations and their owners, niche.
• Energy credits — OBBBA modified several IRA-era energy credits. Coverage TBD as IRS guidance lands.
• Healthcare provisions — primarily on the spending side, with some HSA + HDHP tweaks we'll cover in a future article when the operational rules clarify.

If your situation involves any of the above and you want a Discovery call to talk through it, book one — we'll tell you honestly whether we can serve it well or whether you need a specialist firm.