Review of the OBBBB

The “Big Beautiful Bill” moves a long list of TCJA-era tax rules from temporary to (mostly) permanent and layers on targeted new opportunities and limits for both individuals and business owners. For affluent and ultrahighnetworth families—particularly those who built and still own operating companies—this is as much a legacy and exitplanning bill as it is an income tax bill.

Below is DWM’s highlevel take on what matters most, and what to start planning for now.

Summary

• Individual tax brackets stay at current (TCJA) levels permanently, with a higher standard deduction, a richer Child Tax Credit, a temporary “senior bonus” deduction (2025–2028), and a higher SALT cap of $40,000 through 2029; the QBI 20% deduction is made permanent.​

• The estate and gift tax exemption rises to $15M per person starting in 2026 (indexed), materially expanding the runway for lifetime gifting and multigenerational trust planning.​

• For businesses, 100% bonus depreciation is restored permanently, Section 179 and childcare credits are enhanced, domestic R&D is fully expensable again, interest limits become more lenient (EBITDAbased), and QSBS rules are made more generous—significantly improving the aftertax economics of investment and eventual exits.​

Where things stand now

The Senate has passed the Big Beautiful Bill, and the adjusted version is now in the House for final consideration before it can go to President Trump for signature. While details may still shift at the margins, the structure is clear enough that proactive planning—especially around estate, business succession, and 2025–2028 “window” provisions—should begin now.

For UHNW families, the big picture is: lower (and now permanent) income tax rates, a materially higher future transfertax exemption, richer businessinvestment incentives, and several timelimited opportunities that reward decisive action before 2029.

Key individual tax changes

At the individual level, the bill essentially locks in the TCJA framework, adds a few new deductions and credits, and gives highincome households a somewhat more generous SALT environment—while still retaining meaningful phaseouts at higher MAGI levels.

Permanent TCJA rate brackets

• The current sevenbracket structure (10%–37%) is made permanent, with brackets indexed for inflation and an extra year of indexing for the 10% and 12% brackets.

• For founders and executives managing liquidity events or option exercises, this stability makes multiyear incomesmoothing and bracketmanagement strategies more reliable.

Standard deduction and “senior bonus”

• The higher standard deduction is locked in rather than expiring after 2025.

• From 2025–2028, seniors receive a new additional “senior bonus” deduction of $6,000 per person, phasing out at $150,000 MAGI for individuals and $300,000 for joint filers.

• For retired or semiretired clients with significant portfolio income but relatively modest earned income, this improves aftertax cash flow in the early retirement window.

Childrelated credits

• The Child Tax Credit increases to $2,200 per child, with up to $1,700 refundable and future inflation indexing. One spouse must have a Social Security number on a joint return to claim it.

• The Child & Dependent Care Credit becomes more generous, covering 50% of eligible expenses, with tiered phaseouts tied to AGI. For highearning families still in their peak career years, this is modest relief but rarely planning defining.

New or expanded deductions for workers

• Temporary abovetheline deductions for tips (up to $25,000) and overtime (up to $12,500) apply from 2025–2028, phasing out above $150,000/300,000 MAGI.

• Interest on car loans for U.S.-assembled personal vehicles can be deducted up to $10,000, again with MAGIbased phaseouts and a 2025–2028 window.

• For UHNW households, these are rarely material, but they may matter for nextgeneration family members early in their careers.

Charitable giving and SALT

• Nonitemizers will be able to deduct up to $1,000 of charitable contributions ($2,000 for joint filers) above the line.

• The SALT deduction cap is temporarily raised to $40,000 for 2025–2029, with inflation adjustments and a phasedown beginning above $500,000 MAGI; statelevel PTET “workarounds” remain intact.

• This combination meaningfully improves planning for clients in hightax states, especially when stacked with PTET elections, entitylevel tax planning, and charitable bunching strategies via donoradvised funds or private foundations.

QBI (Section 199A) made permanent

• The 20% Qualified Business Income deduction is made permanent, with expanded phasein limits and a $400 minimum deduction.

• For owners of passthrough entities, the permanence of 199A makes entitychoice decisions (LLC vs. S corp vs. C corp) more strategic rather than defensive, and encourages continued use of passthrough structures in succession planning.

“Trump Accounts” for minors

• A new category of taxdeferred IRAstyle accounts for minors includes a federal contribution of $1,000 for 2025–2028, with structured withdrawal rules.

• For families focused on nextgeneration financial literacy and intergenerational wealth transfer, these accounts can complement 529s and custodial brokerage accounts as part of a “teaching tool” structure.

Estate and legacy planning implications

The headline for legacy planners is simple: the estate and gift tax exemption is headed higher and will be indexed, not snapped back, giving UHNW families a larger—and more predictable—lifetime window for wealth transfer.

Estate and gift tax exemption

• Starting in 2026, the federal estate and gift tax exemption rises to $15 million per individual, indexed for inflation thereafter.

• This change preserves and expands the planning runway that many feared would vanish when TCJA provisions were scheduled to sunset, making SLATs, dynasty trusts, and advanced gifting strategies even more powerful.

Impact on gifting strategy

• Larger, indexed exemptions reduce “use it or lose it” urgency but increase the total amount that can be moved out of the taxable estate over time, especially when paired with discounted entity interests or grantortrust structures.

• For business owners contemplating a sale in the next 5–10 years, designing pretransaction recapitalizations and trusts now can capture both current value and future appreciation outside the estate.

Nonprofit and university provisions

• Certain nonprofit transportation fringe benefits and some royalty income may again trigger unrelated business taxable income (UBTI), increasing the complexity of operating charitable structures.

• Expanded tax on large university endowments may indirectly motivate institutions to revisit naminggift terms, payout policies, and capital campaign structures—relevant to families making eight and ninefigure commitments.

Business owners: incentives and planning windows

For entrepreneurs and closely held business owners, the Big Beautiful Bill is explicitly pro-investment and pro-domestic R&D, while also sweetening the after-tax value of successful exits via enhanced QSBS rules.

Bonus depreciation and Section 179

• 100% bonus depreciation is restored permanently for qualifying property placed in service after January 19, 2025.

• Section 179 expensing limits increase to $2.5 million, with phase-outs starting at $4 million of qualifying property.

• This combination rewards front-loaded capital investment—equipment, technology, and certain real-property improvements—particularly for operating companies still in growth mode.

R&D expensing and interest rules

• Domestic R&D expenses again qualify for full expensing beginning in 2025, with retroactive relief back to 2022 available for small businesses.

• Section 163(j) interest deductibility returns to an EBITDA-based limit permanently, easing constraints on leveraged growth or recapitalizations.

• Together, these provisions reduce the after-tax cost of innovation and moderate leverage, supporting aggressive growth and pre-sale positioning.

Enhanced childcare and workforce-support credits

• The employer childcare credit increases to 40% of qualifying expenses, capped at $500,000 (or $600,000 for small businesses), with inflation adjustments.

• For companies seeking to differentiate on talent attraction and retention, this credit can partially offset the cost of on-site or subsidized childcare.

Qualified Small Business Stock (QSBS)

• Gains on QSBS see a tiered exclusion: 50% exclusion at 3-year holding, 75% at 4 years, and 100% at 5 or more years, with the corporate asset cap rising from $50 million to $75 million.

• This sharply increases the value of careful entity structuring at the formation or early-stage recapitalization phase and rewards patient holding periods before exit.

Business and estate highlights table

Area	Change under the Bill	Planning implication for UHNW families
Estate & gift exemption	Rises to $15M per person in 2026, indexed.	Larger, more predictable runway for large lifetime gifts and trust strategies.
QBI (199A)	20% deduction made permanent with expanded limits.	Supports continued use of pass-throughs for operating companies and real estate.
Bonus depreciation	100% expensing made permanent post-1/19/2025.	Encourages front-loaded capital investment and upgrade cycles.
R&D and interest	Domestic R&D fully expensed; 163(j) returns to EBITDA test.	Favors innovation-heavy and moderately leveraged growth strategies.
QSBS	50/75/100% gain exclusion at 3/4/5+ years; cap to $75M assets.	Increases value of early-stage C-corp planning and patient exit timing.
SALT & PTET	SALT cap lifted to $40K (2025–2029); PTET intact.	More room to manage state tax drag for high-income households and entities.

Strategic moves to consider

For DWM clients, the opportunity is not just saving incremental tax dollars in one year, but aligning these rules with long-term goals: retirement, business transition, family governance, and philanthropy.

Lock in a long-term tax map

• With individual brackets and the standard deduction now effectively permanent, multi-year Roth conversion strategies, concentrated stock diversification plans, and executive compensation deferrals can be modeled with more confidence.

• Families should revisit their income-layering strategies across entities, trusts, and family members to optimize around stable brackets plus the enhanced SALT environment through 2029.

Re-underwrite estate and gifting plans

• Existing documents that were drafted around a presumed post-2025 “snap-back” in estate exemptions deserve a fresh look, including formula clauses, portability assumptions, and the timing/size of SLATs and dynasty trusts.

• UHNW families may want to stage gifts to children and grandchildren around expected liquidity events, pairing the new $15M exemption with valuation discounts and grantor-trust design.

Reassess corporate structure and exit timelines

• Founders should revisit whether C-corp status plus QSBS is now more compelling for new ventures or restructurings, especially when exits are likely at or beyond a five-year horizon.

• For existing pass-throughs, permanence of 199A, improved bonus depreciation, and EBITDA-based interest rules may argue for staying in pass-through form while using holding-company and trust structures to manage long-term transition.

Align philanthropy with new rules

• The charitable above-the-line deduction, changes around UBTI, and increased scrutiny of large endowments suggest that both operating foundations and donor-advised fund strategies may need refinement.

• Families contemplating large naming-level gifts may gain leverage in negotiations as institutions adapt to the new endowment-tax environment.

DWM will continue to monitor the bill’s progress through the House and any technical corrections that follow, and will work with clients’ tax advisors to translate these new rules into concrete, multi-generational plans. For now, the message is clear: the window from 2025–2028 in particular is unusually rich for aligning business decisions, gifting, and exit timing with a more favorable and more predictable tax landscape.

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The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

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