On July 1, 2025, the Senate officially passed The One Big Beautiful Bill Act (H.R.1)—making sweeping tax reform law for the first time in nearly a decade. With both the House and Senate now on board, this legislation ushers in some of the most significant and permanent changes to the tax code since the Tax Cuts and Jobs Act (TCJA) of 2017.
At Evergreen Wealth Advisors, we’re already guiding clients through what these changes mean and how to strategically position their financial plans to take full advantage of the new rules.
Key Highlights of the New Law
1. Tax Cuts and Jobs Act (TCJA) Made Permanent
The TCJA was originally scheduled to sunset after 2025—but under the new law, many of its key provisions are now permanent:
- Income Tax Rates: The seven-bracket structure remains, with rates from 10% to 37%. Brackets will receive enhanced inflation adjustments, which could reduce taxes for many households—especially those in lower and middle-income brackets.
- Capital Gains: No changes here. The top long-term capital gains tax rate remains at 20%, plus the 3.8% Net Investment Income Tax (NIIT).
✅ Planning Insight: Now is a smart time to reassess income deferral, Roth conversions, and bracket management strategies—especially with new inflation adjustments in play.
2. Standard Deduction and Itemized Deduction Enhancements
Several changes aim to simplify and enhance deductions:
- Standard Deduction Increase: Permanently extended and indexed for inflation, with an additional increase of $1,000 (single) / $2,000 (married) through 2028.
- Senior Deduction: Taxpayers over 65 now receive an added $4,000 per person deduction, with phaseouts beginning at $75,000 (single) or $150,000 (married).
- SALT Cap Raised: The State and Local Tax deduction cap increases to $40,000 starting in 2025, with phaseouts at $250,000 (single) / $500,000 (married). The cap will rise annually until 2033, then remain fixed.
✅ Planning Insight: High-income earners in high-tax states may benefit meaningfully from the raised SALT cap—especially if itemizing or approaching the new phaseout thresholds.
3. Relief for Small Business Owners and Professionals
Key updates to the Qualified Business Income (QBI) deduction:
- QBI Increase: The deduction increases from 20% to 23%, and is now permanent.
- New SSTB Treatment: Previously, high-income professionals in Specified Service Trades or Businesses (SSTBs) like financial advisors, attorneys, and doctors lost the deduction entirely once income limits were exceeded. Under the new law, that deduction phases out gradually—offering at least partial relief instead of a full cutoff.
✅ Planning Insight: This new “smoothing” feature creates more flexibility for SSTBs. Income timing, entity structuring, and business classification remain critical tools—but now with a more favorable foundation.
4. Historic Estate Tax Reform
One of the most significant updates is in estate planning:
- Estate Tax Exemption Doubled: Beginning in 2026, the federal estate tax exemption will permanently rise to $15 million per person, adjusted annually for inflation. This is a sharp increase from the previously scheduled reduction to ~$6.5 million.
✅ Planning Insight: While some urgency has lifted, now is still the time to review gifting, legacy, and trust strategies. The elevated exemption creates new flexibility, but planning ahead ensures long-term protection—especially given continued political uncertainty.
5. Corporate Tax Rate Remains Unchanged
Despite debates in both chambers, the corporate tax rate will remain at 21%. No adjustments were made in this legislation.
What This Means for You
With the bill now signed into law, proactive financial planning has become more essential than ever. At Evergreen Wealth Advisors, we’re already working with clients to adapt to the new environment by focusing on:
- Tax-efficient retirement income strategies
- Business structure optimization
- Gifting and estate planning under the new exemption
- Roth conversions and income acceleration
- Maximizing deductions while managing phaseouts
The new law brings opportunity—but also complexity. The decisions you make in the coming months could have a long-lasting impact on your financial future.
Let’s Talk Strategy
If you're wondering how these changes affect your personal or business financial plan, we’re here to help.
Schedule a conversation with our advisory team at Evergreen Wealth Advisors, and we’ll walk you through a customized plan built around these new laws—and your long-term goals.