The One Big Beautiful Bill Act (OBBBA) introduces a suite of tax changes that benefit individuals across income levels. From expanded estate and gift exclusions to enhanced deductions for seniors and charitable donors, here's what you need to know.
OBBBA delivers targeted tax relief through multiple provisions designed to support legacy planning, retirement, and generosity. This article covers four key updates: the $15 million estate and gift tax exclusion, a temporary $6,000 senior deduction, expanded SALT deduction limits, and new rules for charitable contributions.
Estate and Gift Tax Exclusion Raised to $15 Million
• Starting after December 31, 2025, you can now transfer up to $15 million in your lifetime—per individual—without incurring federal estate, gift, or generation-skipping transfer (GST) taxes.
• This exclusion amount will be indexed for inflation beginning in 2026, so it keeps pace with the cost of living.
Temporary $6,000 Deduction for Seniors
• From 2025 through 2028, if you’re age 65 or older, you can claim an extra $6,000 deduction—on top of your standard deduction.
• This is designed to make filing easier and reduce your tax bill in retirement.
Expanded SALT Deduction Limits with Phaseouts
• For tax years 2025 through 2029, the SALT deduction limit for individuals who itemize is temporarily increased.
• The limit is $40,000 ($20,000 if married filing separately) for 2025, $40,400 ($20,200) for 2026, and increases by 1% each year for 2027 through 2029.
• If your modified adjusted gross income (MAGI) exceeds a threshold—$500,000 ($250,000 if married filing separately) for 2025, $505,000 ($252,500) for 2026, and 1% higher each year afterwards—your deduction is reduced by 30% of the excess, but not below $10,000 ($5,000 if married filing separately).
• Starting in 2030, the deduction limit returns to $10,000 ($5,000 if married filing separately) for all taxpayers.
Charitable Giving: New Deduction Floors and Ceilings
• For tax years beginning in 2026, if you don’t itemize deductions, you can still deduct up to $1,000 in cash charitable contributions per year, or $2,000 if you file jointly.
• This deduction is taken straight from your taxable income, not as an above-the-line deduction in AGI.
• If you do itemize, your charitable deductions will need to meet a new 0.5% minimum floor.
• There’s also a substantially higher ceiling for donations related to Native Alaskan subsistence whaling.
Conclusion
In summary, OBBBA’s latest tax relief measures are designed to give individuals and families more room to plan for the future, reward charitable giving, and make life a bit easier for retirees and those managing estates. By raising exclusion limits, providing extra deductions for seniors, and expanding opportunities for charitable contributions, these updates support a broad range of taxpayers at different stages of life.
Navigating these changes thoughtfully can help you maximize your benefits and avoid surprises down the road. If you have questions about how these new rules apply to your personal situation, don’t hesitate to reach out to a trusted tax professional. With the right guidance, you can make the most of OBBBA’s opportunities and keep your financial plans on track.