On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA), one of the most comprehensive tax reforms in recent memory. At Avion Wealth, we sift through the noise to spotlight the provisions that matter most – especially for business owners, high‑net‑worth individuals, and families planning for future transitions.
5 Tax Reform Highlights
1. Enhanced Deduction for Seniors (Ages 65+)
The Act introduces a temporary $6,000 deduction for taxpayers aged 65 and older, available through 2028. This benefit stacks on top of the standard deduction, offering additional relief for seniors. However, it begins to phase out for higher-income filers, especially those in our client base.
2. Expanded SALT Deduction Caps
The previous $10,000 SALT cap has been raised to $40,000 (or $20,000 for married filing separately), effective through 2029. Annual inflation adjustments apply. After 2029, the cap reverts to $10,000. This expansion provides relief, but phase-out thresholds kick in above $500,000 of income.
3. Itemized Deduction Limits for Top Earners
Starting in 2026, the Act reduces the scope of itemized deductions for those in the 37% tax bracket. This measure aims to narrow write-offs for top-income individuals. IRS guidance is pending.
4. Charitable Deduction for Non‑Itemizers
Beginning 2026, even taxpayers who claim the standard deduction can deduct charitable contributions—an incentive designed to bolster giving across all income groups. Full IRS rules are still to come.
5. New “Trump Accounts” for Children’s Future Savings
One of the most innovative parts of the Act: “Trump Accounts.” For each child born between 2025 and 2028, the federal government contributes $1,000, and parents can contribute up to $5,000 per year. These accounts grow tax‑deferred and can be used for education, job training, or a home down payment.
Summary Table: Key Provisions at a Glance
| Provision | Effective Period | Applicability |
|---|---|---|
| $6,000 Senior Deduction | Through 2028 | Seniors (65+), phased out at high income |
| SALT Cap Raised to $40k/$20k | Through 2029 (inflation-adjusted) | Itemizers, phased out for >$500k income |
| Itemized Cuts for 37% Bracket | Starting 2026 | High-income filers |
| Charitable Deduction for Non-Itemizers | Starting 2026 | All taxpayers |
| Trump Accounts (Child Savings) | Children born 2025–2028 | Parents, education, training, home purchase |
What This Means for You
For seniors, the extra deduction could provide meaningful, immediate relief. High‑net‑worth households may benefit from the expanded SALT cap, though planning is vital considering phase-outs. Families with young children should consider how to leverage Trump Accounts in long-term wealth transitions – education, homeownership, or skill development.
As always, we monitor IRS rulemaking closely. These provisions blend temporary relief and strategic, long-term advantages. If you have questions about what any of these provisions mean for you, reach out to us. We’re here to help you navigate these changes.
Best,
Paul J. Carroll, CFP®
CEO & Founder, Avion Wealth