Is It Time to Update Your Tax Plan?

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, brought long-awaited relief on the tax front. For many households, it feels like a breath of fresh air: no looming tax hikes, higher deductions, and more predictability. But while the changes are largely positive, they also mean it’s time to revisit your tax plan and make sure your strategies are aligned with today’s reality—not yesterday’s assumptions.

Key Updates You Should Know

1. No More 2026 Tax Bracket Hike
Under prior law, federal income tax brackets were set to rise by about 3% in 2026. That increase would have nudged nearly every taxpayer into higher brackets. The OBBBA blocked that change, keeping brackets stable and saving families from automatic increases.

2. Higher Standard Deductions
The law raised the standard deduction, shielding more income from taxation before itemized deductions even come into play. For many families, this means lower taxable income and simplified filing.

3. SALT Deduction Cap Raised to $40,000
For years, the state and local tax (SALT) deduction was capped at $10,000, which especially hurt families in states like California and New York with high property and income taxes. Now, the cap has been raised to $40,000, restoring a valuable deduction for homeowners and property investors.

Why These Changes Matter

When the old rules were still in place, many families and business owners made decisions assuming tax hikes were on the horizon. For example:

• Some accelerated income recognition, taking bonuses or selling appreciated assets earlier to avoid higher future brackets.
  
• Others bunched charitable contributions into a single year, often through donor-advised funds, to maximize deductions under the $10,000 SALT cap.
  
• Still others avoided certain real estate or investment decisions because the tax math simply didn’t make sense.
  

Now, with higher deductions and stable brackets, those strategies may no longer be the most efficient—and in some cases, they could be leaving money on the table.

Questions Every Family Should Ask

• Withholding: Should your payroll withholding be updated so you’re not giving the IRS an interest-free loan throughout the year?
  
• Estimated Taxes: If you’re self-employed or retired, do your quarterly estimated payments reflect today’s standard deduction and tax brackets?
  
• Charitable Giving: Does your giving strategy still make sense, or should it be updated in light of the higher deduction?
  
• Real Estate: With the SALT deduction cap raised, are there new opportunities in real estate ownership or investment that were previously unattractive?
  
• Estate Coordination: How do these tax changes fit into your broader estate plan? (For example, should trusts or gifting strategies created under the old assumptions be revisited?)
  

The Takeaway

The OBBBA gave taxpayers breathing room, but it also reset the planning landscape. Your tax strategies shouldn’t be left on autopilot. They need to evolve with the law to ensure you’re taking advantage of every opportunity available.

Now is the perfect time to schedule a review with your financial advisor and estate planning attorney. By updating your tax plan today, you’ll ensure it reflects the new reality—and you’ll position your family to keep more of what you’ve worked hard to earn.