What the megabill means for wealth planning

With President Donald Trump’s signature on the One Big Beautiful Bill Act (OBBBA), the federal government has provided some much-desired consistency around the direction of tax policy. The sprawling bill has so many components and areas of impact that it’s worth looking at how it may impact different categories of investors.

Below is a summary of some of the changes and provisions of the bill:

1. All taxpayers: Permanent income tax cuts
Tax changes in the bill take effect immediately and marginal income tax rates will continue to top out at 37%.

2. High net worth investors: Estate tax clarity
That exemption is already historically high and will increase from $13.99 million for individuals this year to $15 million in 2026 and be indexed for inflation in future years.

3. “High tax” states: Higher cap on deductions
The state and local tax (SALT) deduction cap was significantly increased, from $10,000 to $40,000.

4. Small business owners: Favorable treatment of income and expenses
For businesses with average annual gross receipts below $31 million, the reinstatement is retroactive to 2022, providing a boost to smaller businesses.

5. Those saving for education: An expanded approach to 529s
529 accounts now cover more K–12 and trade education expenses with a higher annual limit, and a new “Trump account” offers a one-time $1,000 federal gift for qualifying children born between 2026 and 2028.

Click here to read more from the Capital Group regarding the OBBBA and if you haven’t already…download the UPDATED tax numbers.

Need a second opinion on your portfolio? We can help! Schedule your FREE consultation.

Plus, your weekly market update is here.

Categories

Securities offered through LPL Financial, Member FINRA/SIPC. E2E Financial is another business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance LLC, a registered investment advisor. Independent Advisor Alliance is a separate entity from LPL Financial.

The information contained in this e-mail message is being transmitted to and is intended for the use of only the individual(s) to whom it is addressed. If the reader of this message is not the intended recipient, you are hereby advised that any dissemination, distribution or copying of this message is strictly prohibited. If you have received this message in error, please immediately delete.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. Investing involves risk including the possible loss of principal.

The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The Bloomberg U.S. Aggregate Index represents the U.S. investment-grade fixed-rate bond market. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Market Index captures broad US equity coverage. The index includes 3,204 constituents across large, mid, small and micro capitalizations, about 99% of the US equity universe. Indexes are unmanaged and cannot be invested in directly.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.