As summer winds down and the school year arrives, it feels as though time is slipping through our fingers like sand. Traditionally, the summer season marked a brief reprieve for accountants — a time for continuing education, internal firm improvements, and much-needed vacation time with family and friends.
But ever since COVID-19 reshaped the professional landscape in 2020, the idea of a "summer slowdown" has largely vanished. In today’s world, accountants — or at least the ones you want in your corner — are busier than ever, and this summer has been no exception.
Now, just a few weeks after the signing of the One Big Beautiful Bill Act (OBBBA), we are beginning to unpack what this piece of legislation means for taxpayers. For once, tax professionals received early notice — rather than a year-end surprise — giving us time to digest and plan.
While the OBBBA primarily extends many existing tax provisions from President Trump’s first term, it also introduces several new and notable updates. Although we wouldn't go so far as to call it sweeping tax reform, the bill certainly brings meaningful certainty and changes to the current tax and planning environment.
Over the coming months, we’ll be providing commentary and practical analysis on the OBBBA and related tax planning topics. Below is Part 1 of that series.
PART 1: EXTENDERS
In this first installment of our OBBBA series, we focus on one of the bill’s major objectives: making temporary provisions permanent. While the bill includes a wide range of updates, here are some of the key extenders (but certainly not all of them) that will affect individuals, trusts, estates, and businesses:
Individual and Fiduciary Income Tax Rates
The current tax brackets are now permanent for tax years beginning after 2025.
• Individuals: 10%, 12%, 22%, 24%, 32%, 35%, 37%
• Trusts and estates: 10%, 24%, 35%, 37%
Planning Insight: Having a permanent rate structure provides clarity for long-term planning — particularly when deciding when to recognize income or deductions.
Alternative Minimum Tax (AMT)
The increased AMT exemption amounts and phaseout thresholds for individuals are made permanent. However, for tax years beginning after December 31, 2025, the phaseout thresholds for joint filers and surviving spouses will revert to 2018 levels, and the phaseout rate increases.
Planning Insight: Similar to the regular tax brackets, permanent AMT thresholds allow for better timing strategies — especially around things like stock option exercises or large deductions.
Standard Deduction
The increased standard deduction amounts are made permanent.
Planning Insight: While this simplifies filing for many, it introduces new complexity when weighing the benefits of standard vs. itemized deductions — especially in light of other updates like the state and local tax (SALT) limitation and changes to itemized deductions, which we’ll cover in later installments.
Qualified Business Income Deduction (QBID)
The 20% QBID is now permanent.
Planning Insight: This change may influence how you structure your new or existing business entity. With QBID here to stay, S corporations, sole proprietorships, and partnerships can factor this deduction into long-term planning with greater certainty.
Other Notable Permanent Changes (Rapid Fire)
• Home mortgage interest deduction
• Disallowance of miscellaneous itemized deductions
• Exclusion of discharged student loan debt due to death or disability
These provisions are now also permanent fixtures of the tax code.
Stay tuned for future installments where we’ll break down other major components of the OBBBA, including updates to charitable deductions, business incentives, and estate planning tools. As always, feel free to reach out with questions — we’re here to help you navigate the ever-evolving tax and accounting landscape with confidence.
