Estate Planning Update: Five Key Tax Law Changes

The One Big Beautiful Bill Act, signed into law on July 4, 2025, introduces several important tax changes. As your financial planning partner, I’ve summarized five key provisions that could impact your estate and tax strategies.

1. Higher Transfer Tax Exemptions

Starting in 2026, the estate, gift, and generation-skipping transfer (GST) tax exemptions increase to $15 million per person ($30 million per couple), with annual inflation adjustments.

Planning Tip: This creates more room for tax-efficient wealth transfers. Clients with smaller estates may now focus more on income tax planning and preserving basis step-up at death.

2. SALT Deduction Temporarily Expanded

From 2025 to 2029, the state and local tax (SALT) deduction cap increases to $40,000 per household, phasing out above $500,000 AGI. It reverts to $10,000 in 2030.

Planning Tip: Consider accelerating deductions or bunching expenses during this window. High earners may benefit from income-splitting strategies using non-grantor trusts.

3. TCJA Income Tax Rates Made Permanent

The lower tax brackets from the 2017 Tax Cuts and Jobs Act (TCJA), including the top rate of 37%, are now permanent.

Planning Tip: This provides long-term certainty for strategies like Roth conversions, charitable giving, and trust distributions.

4. Enhanced QSBS Benefits

Qualified Small Business Stock (QSBS) gains are now excluded as follows: 50% after 3 years, 75% after 4 years, and 100% after 5 years. The lifetime gain exclusion cap increases to $15 million.

Planning Tip: These changes make early-stage C corporation investments more attractive. Review your holdings and consider whether C corp status may be more beneficial.

5. QBI Deduction Made Permanent

The 20% deduction for qualified business income (QBI) from pass-through entities is now permanent.

Planning Tip: Business owners can continue to benefit from income timing, aggregation elections, and non-grantor trust strategies. Specified service businesses should still monitor income thresholds.

Opinions expressed are those of Jordan Niefeld, CPA, CFP, CEPA of Raymond James and not necessarily those of Raymond James & Associates. Information contained was received from sources believed to be reliable, but accuracy is not guaranteed.

*Raymond James & Associates does not provide tax and accounting services

Source: www.congress.gov/bill/119th-congress/house-bill/1/text