What the One Big Beautiful Bill Means for Individuals and Estates
The newly signed One Big Beautiful Bill is bringing sweeping changes to the tax code, with a strong focus on simplifying individual taxation and offering more certainty around estate planning. Let’s break down the most impactful individual and estate tax updates included in this historic legislation.
Individual Tax Updates
One of the major wins for taxpayers is the permanent extension of the lower income tax brackets, including the 10%, 12%, and 22% rates, with an additional year of inflation adjustment. The enhanced standard deduction—starting at $31,500 for joint filers in 2025—is also now permanent, offering meaningful tax relief to millions of households.
The bill makes the elimination of personal exemptions permanent, while also locking in the $750,000 mortgage interest deduction limit. Families with children will benefit from a permanent child tax credit, which increases to $2,200 in 2026 and will be adjusted for inflation moving forward.
In a nod to older taxpayers, the bill introduces a temporary $6,000 senior deduction available from 2025 through 2028, phasing out at incomes above $75,000. Other temporary deductions—also available through 2028—include:
Up to $25,000 of deductible tip income for workers in tipped industries.
A deduction for overtime premiums: $12,500 for single filers, $25,000 for joint.
A $10,000 deduction for auto loan interest on U.S.-assembled vehicles.
Charitable giving also gets a boost: the bill creates a permanent above-the-line deduction of $1,000 for individuals and $2,000 for joint filers, while instituting a 0.5% floor for itemized deductions.
High earners should take note: itemized deductions will be limited to 35 cents per dollar for top-bracket taxpayers, and the SALT deduction cap will rise to $40,000 in 2025, gradually reducing back to $10,000 by 2030.
Estate Tax Updates
In a significant change for wealth transfer planning, the estate and lifetime gift tax exemption will rise permanently to $15 million for single filers and $30 million for joint filers beginning in 2026, and will adjust annually for inflation.
These changes are designed to provide long-term clarity, expanded deductions, and planning opportunities for American families across income levels.
