The One Big Beautiful Bill Act (OBBBA), signed into law by President Donald Trump on July 4, 2025, represents the most sweeping U.S. tax overhaul since the 2017 Tax Cuts and Jobs Act (TCJA). This legislation spans hundreds of pages and consolidates numerous policy changes, but its tax provisions are especially consequential for high-net-worth individuals, family businesses, and corporations. Below, we break down the OBBBA’s key changes for wealthy individuals, including major changes in tax policy, new regulatory shifts, incentives and penalties for investments (including real estate and trusts), and the practical impacts on business operations and succession planning. High-net-worth readers and business leaders will find actionable insights on how to navigate and benefit from these changes.

Major Tax Policy Changes Affecting High Earners and Businesses

Income Tax Rates and Brackets

The OBBBA provides long-term certainty by permanently extending the TCJA-era individual income tax rates, including the top marginal rate of 37% for individuals. In other words, previously scheduled post-2025 rate increases have been canceled, and the seven-bracket structure (10%, 12%, 22%, 24%, 32%, 35%, 37%) remains in place, with brackets indexed for inflation. On the business side, the federal corporate tax rate stays at 21%, unchanged and made permanent under the new law. By removing uncertainty about future rate hikes, high-income taxpayers and business owners can make long-term financial plans with more confidence.

State and Local Tax (SALT) Deduction

In a boon to taxpayers in high-tax states, the OBBBA raises the SALT deduction cap from $10,000 to $40,000 (for married joint filers) for tax years 2025 through 2029. This higher cap reverts to $10,000 in 2030 absent further legislation. Do note that the benefit phases down for individuals earning over $500,000 and fully phases out at $600,000 of modified adjusted gross income. Importantly, the popular pass-through entity tax (PTET) workaround remains intact, allowing owners of partnerships, LLCs, and S-Corps to pay state taxes at the entity level to effectively bypass the individual SALT cap.

High-net-worth individuals should coordinate with their tax advisors or family office to capitalize on the temporary SALT relief, possibly by prepaying or shifting state tax payments into these years and utilizing PTET elections where available.

Qualified Business Income (QBI) Deduction for Pass-Throughs

The 20% deduction for pass-through business income (IRC §199A) – a key tax break for owners of S-corporations, partnerships, and LLCs – was slated to expire after 2025, but OBBBA makes this deduction permanent. Even better, it liberalizes the rules: the income thresholds for phase-outs are increased to $75,000 for single filers and $150,000 for joint filers (previously $50k and $100k). Additionally, even smaller business owners get a minimum deduction – if you have at least $1,000 of qualified business income, you are guaranteed a $400 deduction (indexed for inflation). These enhancements mean many business owners can continue to enjoy an effective federal tax rate on pass-through profits that is significantly lower than the ordinary rate, long into the future.

For high-net-worth business owners, this cements the tax-efficient appeal of pass-through entities, and may influence decisions about business entity choice or restructuring. (Notably, carried interest tax treatment was left unchanged by the bill – the preferential capital gains treatment for investment fund managers’ profit interests remains intact, contrary to some pre-OBBBA proposals.)

Individual Deductions and AMT

The Act introduces several adjustments to individual deductions:

• The standard deduction levels, initially doubled by the TCJA, are now locked in permanently at $15,750 for singles ($31,500 joint) with inflation indexing.
• A new temporary above-the-line Senior Deduction of $6,000 is available for taxpayers aged 65+ from 2025 through 2028 (phasing out at income $150,000 joint/ $75,000 single) , which higher-income seniors may partially benefit from if their incomes are below the phase-out thresholds.
• Miscellaneous itemized deductions (like investment management fees and unreimbursed employee expenses) remain fully disallowed, as per TCJA, and OBBBA makes that disallowance permanent beyond 2025.
• The mortgage interest deduction cap of $750,000 principal debt is unchanged and made permanent (interest on home equity loans remains non-deductible).
• Charitable contributions: Starting in 2026, there’s a new limitation for high earners: itemized charitable deductions will be reduced by a small floor equal to 0.5% of the taxpayer’s adjusted gross income, and for those in the top bracket, an overall cap limits the tax benefit of itemized deductions to 35 cents on the dollar beyond the 37% bracket threshold. In practice, this functions similarly to a revived Pease limitation, trimming the value of itemized deductions (including charitable gifts) for ultra high-income filers. Wealthy philanthropists may need to adjust their giving strategies (for example, using donor-advised funds or bunching donations) to maximize tax efficiency under these new rules.

On the positive side, nonitemizers get a break: OBBBA restored the charitable deduction for taxpayers who take the standard deduction – up to $1,000 for single filers or $2,000 for couples can be deducted for charitable contributions each year, starting in 2026.

– Alternative Minimum Tax

• The Alternative Minimum Tax (AMT) for individuals sees its TCJA-level exemption amounts made permanent as well. However, the phaseout of the AMT exemption is tweaked to kick in faster for very high incomes (above $500k single / $1 million joint, the exemption phases out at a 50% rate instead of 25%). This ensures the wealthiest pay at least a minimum tax, but with the large exemptions, relatively few taxpayers will be affected, as under current law.

Capital Gains and Investment Income

The OBBBA did not increase the base capital gains tax rates – top long-term capital gains and qualified dividend rate remains 20% (23.8% with net investment tax). Instead, changes focused on expanding incentives for certain investments:

Qualified Small Business Stock (QSBS) Gain Exclusion:

Investors in startups and growth companies get a significant boost. Under prior law, selling qualified small business stock (Section 1202 stock) held for 5+ years could allow excluding up to $10 million of gain (or 10x basis) from tax. OBBBA increases the exclusion cap to $15 million (or 10x basis) per investment and raises the company size limit from $50 million to $75 million in assets for stock to qualify. It also introduces tiered exclusion rates: a 50% gain exclusion after 3 years of holding, 75% after 4 years, and the full 100% exclusion at 5 years.

These QSBS enhancements apply to stock issued after July 4, 2025For high-net-worth investors and family offices, this creates powerful capital gains tax planning opportunities: investing early in promising small companies can yield entirely tax-free gains if held long enough.  It may also encourage using trusts or family gifting to multiply the $15 million exclusion across multiple taxpayers.

– Opportunity Zones (OZ) Permanence:

The bill makes the Opportunity Zone program – which provides deferral and partial exclusion of capital gains when reinvested in designated low-income community investments – permanent beyond its original 2026 sunset. However, it narrows the scope of qualifying zones by updating the definition of eligible low-income communities (many existing zones may be trimmed). Going forward, new OZ designations will occur on a rolling 10-year basis starting in 2026.

The tax benefits are also tweaked: OBBBA locks in the 10% basis step-up (tax-free gain portion) for investments held at least 5 years and even introduces a larger 30% step-up for certain rural opportunity fund investments. Keep in mind that any capital gains that were deferred into the original OZ program still must be recognized by the end of 2026 under prior rules.

Wealth managers and investors should revisit Opportunity Zone strategies: with permanence, OZ funds become more attractive for long-term allocations, but one should also plan for the 2026 gain recognitions – possibly by harvesting losses elsewhere, utilizing charitable remainder trusts, or deploying the new bonus depreciation to offset income. These decisions should be coordinated as part of broader capital gains strategies and tax efficient investment strategies tailored to the investor’s risk profile and planning timeline.

– “Trump Accounts” – Tax-Favored Youth Savings:

OBBBA creates a new investment vehicle nicknamed “Trump Accounts,” a kind of tax-favored savings plan for minors. These accounts function similarly to a Roth IRA for kids: parents or other family can contribute up to $5,000 per year (after-tax dollars) for a child under 18, and the money grows tax-free. Employers can also chip in up to $2,500 for an employee’s child, but total contributions per child are capped at $5,000 annually. For children born 2025–2028, the government will even seed a $1,000 starter contribution. Investment options are limited to broad stock index funds, and withdrawals of gains will be taxed at ordinary rates when eventually taken out.

While the contribution limits are relatively modest (and thus not a major factor for ultrawealthy families’ overall wealth), these accounts present an opportunity to jump-start a child’s investment growth tax-free. High-net-worth individuals may consider funding Trump Accounts for children or grandchildren each year as part of a gifting strategy, effectively creating a nest egg for them that compounds without annual taxes. (Funds must stay put until the child turns 18, so this is a long-term play.)

– 529 Plan Expansion:

Education savings got a nod as well. The list of qualifying expenses for 529 college savings plans is expanded to include certain K-12 education costs at public, private, or religious schools. Additionally, OBBBA permanently allows tax-free rollovers from 529 plans to ABLE accounts (tax-advantaged accounts for disabled individuals) without penalties. Wealthy families often utilize 529 plans for multi-generational education funding; now these plans have more flexibility, including the ability to repurpose unused college funds for special needs planning via ABLE rollovers.

Estate and Gift Tax Relief:

A headline win for affluent families is the significant increase in federal estate, gift, and generation-skipping transfer (GST) tax exemptions. The OBBBA permanently extends and further raises the unified lifetime exemption, which was about $12.9 million in 2023 and set to drop in2026. Under the new law, the exemption jumps to $15 million per individual (approximately $30 million for a married couple) as of 2026, with annual inflation indexing going forward. In practical terms,far fewer estates will be subject to federal estate tax, and wealthy individuals can transfer more wealth tax-freeduring life or at death.

High-net-worth families should reassess their estate plans and gifting strategies in light of this expanded exemption. For those who were concerned about the previous provision“sunsetting” in 2026 back down to roughly $6 million per person, that risk is gone – OBBBA locks in ahistorically high exemption floor. Estate planners are advising clients to take advantage of this window:for example, by using the increased exemption to fund or top up trusts for descendants. Sophisticatedtechniques like Spousal Lifetime Access Trusts (SLATs), Intentionally Defective Grantor Trusts (IDGTs), dynastytrusts, and other irrevocable trusts can allow affluent couples to utilize the $30 million joint exemption nowwhile still keeping some access or control indirectly. Even those who have already used most of theirold exemption may consider additional techniques (like Grantor Retained Annuity Trusts (GRATs) or sales totrusts) to shift future appreciation out of their estates at minimal tax cost.

The key takeaway:

The higher exemption is a use-it-or-possibly-lose-it opportunity – while it’s permanent in the law, political windscould change in future years, so wealthy individuals should act sooner rather than later to lock in transfersunder favorable terms. Working with an estate planning advisor is recommended.

Note:The step-up in basis at death for capital assets was untouched by OBBBA (prior proposals to alter it were dropped), so that benefit remains. Additionally, valuation discounts for transfers of interests in family businesses or illiquid assets remain available – OBBBA did not include any new restrictions on popular estate planning practices like discounting minority interests in closely-held entities.

Business Tax Benefits

The new law contains several pro-business tax provisions that will impact corporate investment decisions and taxable income calculations:

– Full Expensing / Bonus Depreciation:

Perhaps most significant, the 100% bonus depreciation for qualifying business assets is now permanent. Under TCJA, bonus depreciation (immediate write-off of capital expenditures) was phasing down from 100% to 80% in 2023 and further thereafter, set to fully expire by 2027. OBBBA reverses that course: any qualifying property acquired and placed in service after Jan 19, 2025 is eligible for a full first-year write-off with no sunset. This includes most machinery, equipment, computers, and even certain qualified improvement property. Additionally, the Section 179 expensing limit (immediate deduction for small business asset purchases) was increased to $2.5 million per year with a higher phase-out threshold of $4 million, indexed for inflation.

For businesses, large and small, these provisions supercharge depreciation deductions and improve cash flow when making new investments. High-net-worth business owners can accelerate deductions on capital-intensive purchases – from factory machinery to private aircraft – reducing taxable income and potentially supporting expansion. Real estate investors can also benefit via cost segregation strategies, carving out shorter-life components of buildings to qualify for immediate expensing.

– Interest Expense Deductions (Section 163(j)):

OBBBA delivers relief on the limitation for deducting business interest. Instead of tightening to an EBIT-based limit, the law permanently keeps the higher 30% of EBITDA limitation for net business interest expense. The TCJA had planned to make interest deductibility stricter in 2022 by switching to an EBIT (earnings before interest and taxes) calculation, but that is now undone – more interest can be deducted upfront, which is especially helpful for highly leveraged businesses (e.g. in real estate and private equity).

Example: Real estate enterprises that borrow heavily can continue deducting interest up to 30% of EBITDA without having to use longer depreciation lives (the electing real property trade/business exception remains available but may be less needed). However, note that OBBBA also updated the rules to ensure that interest which is capitalized (e.g. construction period interest) is counted toward the 30% limit and that any allowed interest deduction is applied first to that capitalized interest.

Overall, this is a net positive for business borrowers. Wealthy investors utilizing leverage in operating businesses or investment structures (like leveraged investment “blockers”) will enjoy greater interest write-offs, improving the after-tax returns of debt-financed projects.

– Research & Development (R&D) Expenses:

In a reversal of a recent change, all domestic R&D costs can again be deducted immediately rather than amortized over the years. The TCJA’s requirement to capitalize and amortize R&D expenses over 5 years (15 for foreign R&D) had just kicked in for 2022, but OBBBA permanently restores the ability to expense R&D in the year incurred. Moreover, small businesses (under $31 million gross receipts) are allowed to retroactively opt for immediate expensing of R&D for 2022–2024, potentially yielding refunds or lower taxes. This change encourages innovation and development.

Family offices and private investors backing tech, biotech, and other R&D-heavy ventures should ensure their portfolio companies take advantage of these immediate deductions (and, if eligible, consider filing amended returns to claim retroactive R&D write-offs).

– Excess Business Losses (EBL) Limitation:

The rule that prevents non-corporate taxpayers from using business losses above a certain threshold to offset other income is now made permanent. Under OBBBA, individuals cannot annually deduct business losses in excess of about $313,000 (single) or $626,000 (joint) – these inflation-indexed thresholds mirror the 2025 limits and will continue indefinitely. Any disallowed losses convert to net operating loss carryforwards to use in future years. In essence, this limitation, first introduced in 2018 and set to expire in 2029, will now be a lasting feature.

High-net-worth investors with pass-through business losses (for example, from startups, real estate holdings, or trading businesses) should be aware that extremely large losses can only provide a tax benefit up to this cap each year, with the rest deferred. While not a new penalty, the permanence of the rule means strategic planning for loss utilization – such as timing income recognition or grouping activities – remains important.

– Corporate Charitable Contributions:

Corporations get a bit of a break on philanthropy. Previously, C-corporations could deduct charitable donations up to 10% of taxable income. OBBBA adds that donations above 1% of income are allowable up to that 10% ceiling, and allows carrying forward excess contributions for 5 years if the 10% limit is exceeded. This effectively codifies a temporary COVID-era increase and encourages corporate giving without losing deductions. For family-controlled corporations or corporate foundations, this provides flexibility to make larger charitable gifts in profitable years.

– Executive Compensation Deduction (Section 162(m)):

The law tightens the net around the $1 million executive pay deduction limit by adopting a broader aggregation rule. Now, related entities under common control must be grouped when applying the $1M cap on deductible compensation for each “covered” executive. In practice, this means large business groups can’t circumvent the limit by spreading an executive’s employment across multiple affiliated companies. Public companies and certain large private companies will need to ensure compliance with this expanded scope starting in 2026.

For business owners, while this doesn’t affect personal taxes, it could slightly increase corporate tax bills if highly paid executives’ salaries can’t be fully deducted. It’s a corporate governance consideration for boards and compensation committees, particularly in family-led enterprises that have expanded into multiple entities.

– Other Business Changes:

There are numerous narrower provisions. To note a few:

• OBBBA clarifies partnership “disguised sale” rules, essentially preventing gamesmanship in how partners take distributions for contributed property by affirming the proper tax treatment regardless of regs.
• It raises the ownership limit of Taxable REIT Subsidiaries from 20% to 25% of a REIT’s assets, allowing REITs slightly more leeway to hold subsidiary businesses.
• It terminates a deduction for energy-efficient commercial building upgrades after 2026 (likely shifting incentive toward separate energy credits).
• And it expands expensing to new areas: for example, certain domestic “qualified production property” (like new manufacturing facilities started by 2028) can opt for 100% expensing during a limited window, and even up to $150,000 of the cost of producing live sound recordings can be expensed now – an interesting perk for the entertainment industry.

Regulatory Shifts in Wealth Management and Compliance

Beyond tax rate changes, the OBBBA brings regulatory adjustments that affect private wealth management and business compliance. Many feared onerous new rules on trusts or wealth reporting, but the final Act omitted several controversial proposals, much to the relief of advisors. Crucially, earlier drafts floated new taxes on ultra-wealthy individuals (a so-called “Section 899” surtax) as well as restrictions on popular wealth-planning vehicles. In the end, none of those made it into the law. For example, carried interest rules remain unchanged, private placement life insurance (PPLI) and annuities (PPVA) retain their tax advantages, and there’s no new tax on large private foundations or on investment strategies like litigation finance.

By preserving the status quo on these fronts, the OBBBA leavesintact many tools that family offices and high-net-worth individuals use to manage taxes and investmentsglobally.

That said, there are several compliance-related changes to note:

Information Reporting Thresholds

The Act updates decades-old reporting rules by raising the threshold for Form 1099 reporting. The minimum amount for issuing certain 1099s (like for freelance payments or rents) will increase from $600 to $2,000, indexed for inflation. Likewise, the IRS’s much-debated new Form 1099-K reporting threshold for payment apps (which had been dropped to $600 for even small transactions) is being rolled back to the pre-2022 standard: no 1099-K required unless a payee has over $20,000 and 200 transactions. This is retroactive to 2022, restoring a higher de minimis threshold .

For wealth management and business accounting, these higher reporting limits reduce compliance burdens on small or infrequent transactions – fewer tax forms will be generated for minor payments. Family offices and businesses will still need to report significant payments, but can breathe easier about being flooded with 1099s for trivial amounts.

Foreign Investment Structures (CFC Rules)

A technical but important change for global investors is the restoration of the “downward attribution” rule under controlled foreign corporation (CFC) regulations. The 2017 tax law had expanded CFC reach by allowing stock ownership of foreign corporations to be attributed from non-U.S. persons to U.S. persons, ensnaring many foreign investment entities in CFC status unexpectedly. OBBBA reinstates the pre-2017 rule (repeals the TCJA’s Section 958(b)(4) repeal), effective after 2025.

This change will make it easier for non- U.S. investors (including foreign family members or offshore trusts) to invest in U.S. real estate and businesses via U.S. “blocker” corporations without causing CFC complications. Previously, a foreign fund or entity could inadvertently become a CFC due to U.S. minority shareholders, jeopardizing the favorable portfolio interest exemption (which allows interest paid to foreign lenders to avoid withholding tax). With the old rule back, many foreign-owned entities will no longer be deemed CFCs just because of tenuous ownership links. However, the Treasury is granted authority to issue new regs defining “foreign-controlled foreign corporations” to potentially curb abuse.

– Actionable Insights on CFC Rules

Wealthy non-U.S. investors who use U.S. corporations to invest in U.S. assets (common to avoid direct FIRPTA exposure in real estate or to block estate tax on U.S. assets) will find it easier to avoid unintended CFC status. This could increase inbound investment, as foreign family offices might be more willing to partner with U.S. investors without triggering punitive U.S. tax regimes.

U.S.-based multinationals or global investors should revisit their organizational charts with international tax counsel to identify any entities that were classified as CFCs solely due to the attribution rules and confirm if they will be free of that status after 2025. This can simplify compliance (CFC reporting under Form 5471, etc.) and potentially make certain financing structures (like intercompany loans qualifying for portfolio interest) more viable.

Trust-Level Tax Planning and Compliance

The higher SALT deduction cap and the permanent QBI deduction have an interesting application to non-grantor trusts, since each trust is essentially its own taxpayer. Estate planners point out that trustees may exploit this by distributing or structuring trust assets across multiple trusts to multiply tax benefits. For example, each non-grantor trust can potentially deduct up to $40k of state taxes (if it has its own income and state tax liability) and claim its own QBI deduction or $400 minimum, subject to thresholds. This might incentivize splitting family investments into separate trusts for children or different branches of a family rather than one pooled trust, to maximize use of these deductions per trust.

While this is a planning opportunity, it also raises compliance complexity – more trust tax returns and careful coordination of distributions. Wealth managers should review existing trust structures in light of these changes and ensure they remain compliant while seizing available tax breaks.

Expanded 162(m) Monitoring

As noted, the aggregation of entities for the executive pay deduction limit means corporate groups (including some family-owned conglomerates or private equity portfolio groups) must identify if they have overlapping “covered employees” across entities. Tax departments and accountants will need to implement tracking for the new controlled group rule starting in 2026.

This is a compliance consideration – ensuring that your payroll systems and tax filings properly account for the $1M deductibility cap across all related companies. It primarily affects public companies and large private companies; smaller businesses aren’t subject to 162(m) unless they’re publicly held or certain large private firms.

Partnership Transactions

The clarification on disguised sales in partnerships essentially codifies IRS positions to prevent partners from mischaracterizing transactions. While not a new filing requirement, partnership agreements and deal structures should be reviewed with counsel to ensure they align with the clarified rules to avoid unexpected taxes. It’s a nuanced area, but anyone involved in transferring property into partnerships and receiving distributions in return should be aware of the tightened anti-abuse stance.

Bottom line on regulatory changes

The OBBBA largely simplified or eased certain compliance tasks (higher 1099 thresholds, undoing over-broad CFC rules) and avoided imposing new burdens that were anticipated (no new wealth taxes or foundation rules). High-net-worth families can continue employing tried-and-true strategies (trusts, PPLI, family investment entities) under stable rules, but should stay vigilant. The current law grants generous opportunities, yet future administrations could revisit aggressive tax enforcement or reporting measures, especially if political tides shift. Therefore, taking advantage of the permissive environment now, while keeping good documentation and compliance, is prudent.

New Penalties: Investments, Real Estate, and Trusts

The Act creates a mix of tax incentives to spur investments, seen above, and a few new limitations or penalties that mostly target perceived loopholes or luxury benefits. Here are the key limitations and penalties.

Luxury and Personal Expense Deductions

The law cracks down on certain deductions that were seen as loopholes or excesses. A prominent example is the permanent disallowance of the employer deduction for entertainment and certain meals. TCJA had eliminated the deduction for entertainment and limited meal deductions; OBBBA goes further by barring deductions for most employer-provided meals altogether (with very limited exceptions) from 2026 onward. Businesses (including ones owned by high-net-worth individuals) can no longer write off the cost of company cafeterias or meals provided for the convenience of the employer – these become fully non-deductible expenses, effectively raising their after-tax cost. This change means companies might revisit their perks like free lunches or client entertainment budgets.

High-Income Itemized Deduction Cap: As discussed in the individual changes, the 35% cap on the benefit of itemized deductions for top-bracket taxpayers acts as a soft penalty on extensivedeductions. Practically, it means a millionaire in the 37% bracket doesn’t get the full value ofdeductions beyond a threshold – for every dollar of itemized deductions, only $0.35 is saved in tax(instead of $0.37). This measure, combined with the 0.5% AGI floor for charitable contributions, isintended to ensure high earners pay a baseline level of tax. The planning response here is torecognize that beyond a certain point, additional itemized deductions (e.g., large charitable gifts,interest on big mortgages, etc.) yield diminished marginal tax benefit.

Wealthy individuals mightthus focus on above-the-line deductions and credits (which aren’t subject to this cap) or employcharitable vehicles that have other estate/gift benefits to justify them, rather than purely income taxwrite-offs.

Continued Limits on Losses

By making the Excess Business Losses cap permanent, the law reinforces that the ultra-wealthy cannot use massive paper losses from business ventures to nullify all their other income in a given year. For example, if a non-corporate investor has $5 million of losses from various businesses, they can only use ~$626k (for a couple) to offset other income that year; the rest becomes an NOL. This isn’t a new penalty per se, but it’s a permanent guardrail. It encourages spreading out loss-harvesting and being strategic: e.g., carryover losses can offset up to 80% of future taxable income, so plan to use them in high-income years going forward rather than expecting unlimited current-year shelter.

No New Wealth Taxes, But Caution

It bears repeating that some potential penalties did not materialize in the final Act. There is no “surtax” on ultra-high incomes or net worth (an idea thatwas floated in early debates). There was also no direct change to grantor trust rules or capitalgains at death – strategies like GRATs, dynasty trusts, and gifting assets at a low basis remain viable.The lack of new punitive measures is itself a relief to the high-net-worth community. However, as aplanning note, estate advisors caution that this favorable environment could be temporary; futurelegislation could revisit these areas. Thus, taking advantage of today’s incentives (e.g., using upexemptions, locking in valuation discounts, etc.) is recommended while staying nimble to adjust ifthe tax landscape shifts again.

Impact on Business Operations, Structures, and Succession Planning

With the OBBBA’s changes in place, wealthy individuals and business owners should reassess their strategies for both day-to-day operations and long-term planning. Here’s how different aspects might beimpacted:

Business Investment and Operations

The tax savings from 100% expensing and enhanced interest deductibility mean that businesses can more confidently undertake capital projects. Corporate leaders and family business owners might accelerate plans to purchase equipment, upgrade facilities, or acquire business assets since the costs can be immediately deducted, boosting after-tax cash flow. For example, a manufacturing company owned by a high-net-worth family can invest in new production lines or automation and realize the tax benefit upfront, improving the project’s return on investment. Similarly, real estate developers can plan new construction or improvements knowing that many costs can be written off in Year 1 (often via cost segregation analyses). This effectively reduces the risk of long-term projects, as more capital can be recovered if the project doesn’t pan out as expected.

Companies should update their tax depreciation schedules and forecasts for 2025 onward to reflect these new rules and identify opportunities for tax-driven project timing (e.g., placing assets in service just after the effective date to qualify for immediate expensing).

– Regulatory Certainty

The preservation of the low corporate tax rate at 21%, combined with the permanent pass-through deduction, means the fundamental calculation of “Should my business be a C-Corp or S-Corp/LLC?” remains important but now comes with certainty. Owners of profitable businesses should consult advisors to compare the long-term tax efficiency of pass-through versus C-corporation structures given their specific circumstances. Many businesses will continue to prefer pass-through status (to utilize the 20% QBI deduction and avoid double taxation on distributions). However, C-corps still offer a flat 21% rate and other advantages (like easier reinvestment of earnings and no limitation on loss usage at the corporate level).

The key point is that OBBBA’s permanence allows for a strategic structural decision without the worry of an imminent automatic change in tax law. Family businesses that were considering converting to C-Corp or vice versa due to the prior uncertainty can now proceed with clearer foresight.

Philanthropy and Legacy

Wealthy philanthropists should revisit their giving vehicles in light of the new deduction limits. With itemized deductions capped in benefit for top earners, strategies like donor advised funds (DAFs) or private foundations (which allow spreading out deductions over multiple years subject to AGI limits) might become even more useful to manage the timing of deductions. As part of broader philanthropic planning, these vehicles offer flexibility and control over charitable impact while optimizing tax benefits.

The OBBBA didn’t impose new payout requirements or excise taxes on private foundations (those mooted ideas were dropped), so private foundations remain a viable tool for those charitably inclined – though recall that only up to 30% of AGI in gifts to a private foundation are deductible each year (60% for public charities/ DAFs). The extension of the non-itemizer charitable deduction might not directly affect HNW individuals (since they typically itemize), but it underscores a theme of encouraging broad-based giving.

Families may consider making use of the non-itemizer deduction for younger members or less wealthy relatives who don’t itemize – for instance, funding charitable gifts by family members who take the standard deduction, so they too can enjoy a tax benefit for philanthropy.

Actionable Insights for the Wealthy

Leverage Tax Certainty

With income tax rates locked in and estate tax relief extended, use the next few years to execute any deferred tax planning. This might mean realizing gains (knowing capital gains rates are stable), accelerating income or deductions into optimal years, and confidently implementing multi-year strategies.

Maximize Use of Expanded Exemptions

If you have a large estate, utilize the $15M exemption ASAP. This could involve large gifts to trusts, funding family limited partnerships, or other intra-family transfers while the climate is favorable. Document and complete these transfers well before any potential political shifts.

Reinvest in Your Business

Evaluate capital expenditure plans and consider front-loading investments to take advantage of full expensing. Whether it’s modernizing facilities, buying equipment, or expanding operations, the tax code is encouraging you to do it now by offering immediate deductions.

Review Trust Structures

Work with your estate planner to see if creating additional non-grantor trusts could save income taxes (via multiple SALT caps or QBI deductions), or if converting some grantor trusts to non-grantor status post-gift could make sense. Be mindful of administrative costs versus tax savings, however.

Refine Your Investment Portfolio

Consider tilting a portion of your portfolio to assets that generate preferential tax outcomes under OBBBA. For example, early-stage QSBS investments now have an even greater after-tax payoff, and real estate or infrastructure projects may yield higher returns given the tax shield of depreciation and interest. If you have large deferred gains from pre-2025 that will be recognized in 2026 (due to prior Opportunity Zone investments), start planning now to offset that taxable event – possibly by harvesting losses or setting up a charitable remainder trust in 2026 to spread out and reduce the tax hit.

Stay Compliant and Nimble

Though the outlook is positive, keep your financial team alert to implementing new compliance rules (like updated 1099 thresholds, aggregation for comp limits, etc.) and ready to adapt if any technical guidance comes out. For instance, Treasury might issue regulations for the foreign CFC workaround or other technical areas – have your advisors monitor developments. Also, maintain flexibility: strategies such as SLATs or GRATs can often be unwound or adjusted if laws change, so build contingencies into your plans.

Conclusion

The One Big Beautiful Bill Act ushers in a largely pro-taxpayer landscape for high-net-worth individuals and businesses. Taxes are reduced or kept low across the board – from income and capital gains taxes to estate taxes – while generous incentives aim to fuel investment in businesses, real estate, and communities. Compliance has been simplified in certain areas, and feared crackdowns on common wealth strategies did not materialize.

For wealthy families and business leaders, the message is clear: take advantage of this new tax environment to fortify your financial positions. Expand your investments, transfer wealth strategically, and align your operations to reap the available tax benefits.

At the same time, remain vigilant and proactive – use the current window of opportunity to lock in benefits (like higher exemptions or tax-free growth in new accounts) and prepare for long-term resilience. Tax laws can always change, but with the actionable steps outlined above, high-net-worth individuals and businesses can confidently navigate the OBBBA’s provisions and secure their wealth for the years ahead.

With OBBBA now law, it’s the ideal time to revisit your tax strategy. Tiempo Capital’s advisors deliver personalized tax optimization strategies and capital gains tax planning for high-net-worth individuals and families. Learn how we help Miami, South Florida, and Puerto Rico clients adapt to legislative change — and schedule your consultation today.

Bibliography

H.R.1 – One Big Beautiful Bill Act, 119th Congress, July 1, 2025 [link]

Dentons, “Estate & Business Planning Implications of the One Big Beautiful Bill Act,” July 11, 2025 [link]

McDermott Will & Emery, “Key OBBBA Implications for Family Offices and High-Net-Worth Investors,” July 14, 2025 [link]

Goodwin Procter, “One Big Beautiful Bill Act — Tax Highlights Related to Real Estate Investors,” July 14, 2025 [link]

HCVT, “What the One Big Beautiful Bill Act Means for You: A Tax Overview,” July 11, 2025 [link]

Withum, “One Big Beautiful Bill Act: Estate and Trust Planning,” July 11, 2025 [link]

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