The One Big Beautiful Bill Act (H.R. 1), a legislative behemoth recently passed in Washington, may have a humorous name, but its implications for investors, taxpayers, retirees, and business owners are far from insignificant.

This comprehensive package secures reduced tax rates, modifies healthcare and energy incentives, and restarts the estate planning process for wealthy families. Below, I'll break down what mattersand how you might want to adjust your planning.

Permanent Tax Cuts, Fewer Deductions
Tax Brackets
The bill makes permanent the 2017 Tax Cuts and Jobs Act (TCJA) rates for individuals and corporations.

Standard Deduction Increase (2025 forward):
  • $15,750 for Single Filers
  • $31,500 for Married Filing Jointly
  • (Indexed for inflation.)
Gone for Good:
  • Personal exemptions
  • Misc. itemized deductions (investment advisory fees, tax prep, unreimbursed job expenses)
  • Moving expense deduction
  • Casualty loss deductions (unless in a federally declared disaster)
  • Bicycle commuting reimbursements

SALT Deduction Cap Relief
The cap has been raised to $40,000 and will begin to phase out at $500,000 MAGI. This represents a limited benefit for high-earners in states with high tax rates.

HSA Enhancements (With Phaseouts)
New 2025 Limits:
  • Individual: $8,600
  • Family: $17,100
  • Both spouses 55+ can contribute catch-up amounts into one HSA
Expanded Uses:
  • Fitness expenses: $500 (individual), $1,000 (family)
  • Retroactive reimbursements up to 60 days before account opening
  • Rollover allowed from FSAs and HRAs up to FSA annual limit

Medicare Eligible?
You're now allowed to contribute to an HSA if you have Medicare Part A and are covered under a qualifying high-deductible health plan (HDHP).

Income Phaseouts Apply:
  • Starts at $75,000 (single) / $150,000 (joint)
  • Phased out completely at $100,000 / $200,000
Planning tip: If you're close to the income threshold, you may be able to lower MAGI via retirement contributions and still qualify.

Clean Energy Incentives Gutted
Electric Vehicles:
  • $7,500 tax credit (new EVs) and $4,000 (used EVs) are eliminated after Sept. 30, 2025
  • New federal fees: $250 annually for EVs, $100 for hybrids
Solar Energy:
  • The 30% residential solar tax credit ends Dec. 31, 2025
  • No credits for leased solar systems
  • Commercial solar ITC eligibility ends for projects not placed in service by year-end 2025
Bottom line: If you're serious about EVs or solar, the opportunity window is rapidly closing.

Estate Planning: Big Opportunity, Bigger Exemption
Federal Estate & Gift Tax Exemption (2026 onward):
  • $15 million per individual
  • $30 million per couple
  • (Indexed for inflation.)
This is a permanent increase, preventing a reversion to the ~$7 million per person level that was scheduled under TCJA sunset rules.

Other Key Notes:
  • The estate tax rate remains at 40%
  • Annual gift exclusion (2025): $19,000 per recipient

Planning Tip: This increase may only be a limited-time chance to use an additional exemption. Consider leveraging gifts and advanced planning tools like Spousal Lifetime Access Trusts (SLATs), Grantor Retained Annuity Trusts (GRATs), or dynasty trusts, before exemptions flattenor shift again under a future administration.

What's Not in the Bill: IRAs & 401(k)s
No changes were made to IRAs or employer retirement plans in the One Big Beautiful Bill. However, SECURE 2.0 updates continue rolling out in 2025:
  • RMD age now 73 (will rise to 75 by 2033)
  • Roth 401(k)s are now exempt from RMDs
  • Expanded catch-up contributions and auto-enrollment rules apply to 401(k)s

Budget Impact & Market Considerations
The Joint Committee on Taxation and independent analysts project the bill will add between $2.5 and $3.3 trillion to the national debt over the next 10 years.
Potential consequences:
  • Upward pressure on Treasury yields
  • Credit rating downgrades
  • Higher long-term interest rates
  • Inflationary risk if not offset by growth

Final Thoughts
The One Big Beautiful Bill presents both generous tax treatment for investors and families in the present, as well as a warning about potential fiscal challenges in the future. It simplifies some areas, penalizes others, and hands high-net-worth households one of the largest estate planning windows in U.S. history.
As always, the winners will be those who plan ahead.

If you want to review your current strategies - tax, estate, HSA eligibility, investments - schedule a time to talk.

Let's make sure your plan is as beautiful as the bill's name claims to be.



If you would like to learn more about ATX Portfolio Advisors, let's Get Acquainted.


Principal
jeff.weeks@atxadvisors.com
(512) 537-5955
www.atxadvisors.com


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