One Big Beautiful Bill Act Enacted in July 2025
The federal tax law expanded deductions and exemptions for households and businesses across the country.
Updated on Oct. 13, 2026 in Taxes
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Enacted in July 2025, the One Big Beautiful Bill Act permanently extended individual income tax rates and increased standard deductions. The legislation also introduced higher limits for estate exemptions and state and local tax deductions.
Why it matters
The law provides significant tax relief through increased deductions, though political efforts to modify or reverse these provisions are underway. These changes affect household financial planning and business investment strategies across the United States.
The 2025 tax law established a $15 million estate and gift tax exemption and temporarily raised the state and local tax (SALT) deduction cap to $40,000 for 2025. These figures provide a baseline for taxpayers, compared against the scheduled return of the SALT cap to $10,000 after 2029.
The players
Donald Trump
As the current President of the United States, he holds veto power over legislative efforts to amend tax laws through 2028.
The details
The law supports taxpayers by preserving a 20% deduction for qualifying pass-through business income and restoring 100% bonus depreciation for eligible business investments. Households currently benefit from the expanded $40,000 SALT deduction cap. However, President Trump retains veto power over any future tax legislation through 2028, requiring two-thirds congressional majorities to override any potential changes.
Timeline
July 2025: The One Big Beautiful Bill Act was enacted.
2026: The estate and gift tax exemption is set at $15 million.
2028: President Trump retains veto power over tax legislation.
After 2029: The SALT deduction cap is scheduled to return to $10,000.
Money Landscape
The One Big Beautiful Bill Act represents a major shift in the federal tax landscape by permanently extending core individual income tax rates. It marks a departure from short-term tax cycle planning, though legislative debate continues regarding the long-term sustainability of these provisions.
Taxpayers should review their 2025 and 2026 tax planning to account for the increased SALT deduction cap and higher estate exemptions. Because political efforts to revise these laws persist, taxpayers should discuss their long-term estate and business tax strategies with a qualified tax professional.
The takeaway
The One Big Beautiful Bill Act introduces substantial changes to estate and business tax thresholds that are currently protected by presidential veto. Monitor upcoming congressional sessions for any legislative movement that might impact these deductions or the eventual reversion of the SALT cap.
Further reading
For more information on how current federal policies affect your financial planning, visit the Taxes section.
Source note: This article includes information reported by FA Magazine.
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