The One Big Beautiful Bill Act (OBBBA) makes several tax cuts permanent, while other changes will likely have a modestly positive impact on most high net worth investors.

The push-and-pull of U.S. politics has always been dizzying, but developments in tax law have put high net worth investors on a roller coaster over the last decade.

That was largely because many tax cuts enacted in 2017 under the Tax Cuts and Jobs Act (TCJA) came with sunset provisions, with most phasing out at the end of 2025. Consequently, many investors had to prepare themselves twice — once to take advantage of the more generous 2017 terms, then again to gird themselves for the December 31, 2025 cutoff.

Given that history, there was a risk that this year’s OBBBA would again force high net worth investors to beat a path to their accountants’ doorsteps in an effort to get ahead of pending changes. However, from a wealth-planning point of view, the OBBBA mostly confirms existing TCJA rules, removing sunset provisions and offering a much-needed measure of certainty, at least for the next few years.

“For high net worth planning, much of the OBBBA maintains a status quo from TCJA, or introduces a bit more opportunity to transfer wealth in tax-efficient ways,” says Anne Gifford Ewing, a senior trust, estate and fiduciary strategist with Capital Group Private Client Services. “And most of the changes involve income tax, more than estate or gift tax, which provides an opportunity to check in with your tax advisor and your Private Wealth Advisor.”

Wealth planning will benefit from much-appreciated tax stability.

Income tax brackets, marginal rates and lifetime exemption amounts for gifts and estates will largely continue to follow the patterns established in 2017’s TCJA.

Marginal income tax rates will continue to top out at 37%, while the lifetime exemption amount — the total amount that you can give to loved ones during your life or leave to them after your death before gift or estate tax kicks in — will increase to $15 million ($30 million for a married couple) starting in 2026.

Appealing for long-term investors, these changes are permanent and indexed to inflation. That’s not to say these rules are guaranteed to last in perpetuity — new legislation could always change them later. But the political reality suggests these changes aren’t likely to be unwound soon: Trump has championed the OBBBA and the Republican congressional majority that passed it will be in power until at least 2027, so significant changes or reversals unlikely to be passed during the remainder of the Trump administration.

That implied longevity could be especially welcome for high net worth investors who had been rushing to take advantage of the higher exemption, says Capital Group senior wealth strategist Leslie Geller.

“There was some uncertainty over whether we would continue to have a historically high exemption from the gift and estate tax,” she explains. “This law removes some of the immediate pressure for high net worth investors to move assets out of their estate.”

There are other tax changes, but they're more limited in scope.

The state and local tax (SALT) deduction cap was significantly increased, to $40,000. However, it will now phase out based on income, starting for individuals or couples filing jointly with more than $500,000 annual adjusted gross income, to a minimum deduction cap of $10,000. Those cutoffs will increase 1% annually, but only for four years — this provision will sunset entirely in 2029, reverting the SALT cap to $10,000 for all taxpayers.

Importantly for some taxpayers, pass-through entity SALT deductions are not affected by this law. Pass-through entities forgo certain corporate taxes and “pass through” the earnings to individuals who then pay income tax on it. After the TCJA’s passage in 2017, several states provided a workaround to the SALT cap by changing their tax codes and allowing deductions at the business level. Early versions of the bill would have limited the effectiveness of these tactics, but those rules didn’t make it into the final version of the OBBBA.

Another bonus for taxpayers using pass-through entities: Section 199A of the TCJA has also been made permanent. This provision allows a 20% qualified business income (QBI) deduction for certain pass-throughs, bringing their tax rates in line with what corporations are paying. The OBBBA also expands who can benefit from this rule.

The law will also allow taxpayers to immediately deduct 100% of the cost of some depreciable real property used as an integral part of production activity. It will also reinstate the immediate deduction of research expenses in tax years 2025 and beyond. For businesses with average annual gross receipts below $31 million, the reinstatement is retroactive to 2022, providing a boost to smaller businesses.

Qualifications for qualified small business stock (QSBS) were also expanded, opening up additional planning opportunities for certain company founders and others who may hold QSBS.

The law also provides some additional options to fund education.

Tax-advantaged 529 accounts can now be used to cover a wider array of qualified educational expenses, including some trade credential programs. Qualified education expenses in connection with enrollment or attendance at an elementary or secondary private or religious school (kindergarten through 12th grade) have been expanded beyond just tuition, including costs for books, online education materials and tutoring fees. Additionally, starting in 2026, the annual limit for K-12 expenses will increase to $20,000 (up from $10,000). Tax-advantaged treatment applies to savings used for qualified education expenses. State tax treatment varies.

The law also introduces “Trump accounts,” a new type of child savings account. These garnered a lot of attention chiefly because the federal government will deposit a one-time $1,000 gift in any Trump account that qualifies for a child born from Jan. 1, 2026, through Dec. 25, 2028, but the accounts themselves are relatively limited.

Additionally, changes to charitable giving could motivate high net worth donors to make more occasional lump-sum gifts rather than smaller, more-frequent gifts. Individuals’ charitable giving will be subject to a new 0.5% floor on itemized deductions and a new $1,000 ($2,000 for joint filers) above-the-line deduction.

What was cut is just as notable as what made it in.

One particularly contentious rule, which was given the ominous-sounding moniker of the “revenge tax,” was cut from the earlier version of the OBBBA that the House passed. It would have taxed U.S. assets held by some overseas investors and businesses, including Americans living abroad. The revenge tax could have deeply complicated holdings for some individuals and had outsize implications for certain kinds of investment vehicles, but the Senate removed the tax from the final legislation. Rather, the law features a new 1% remittance tax for certain transactions involving money leaving the U.S., which will likely add additional expense to certain cross-border investments.

Similarly, early proposals to change how carried interest is taxed didn’t make it into the final version. This income will continue to be taxed at long-term capital gains rate under certain circumstances, rather than as income.

Another proposal that was axed: Rules that would have raised taxes on private family foundations. University endowments didn’t escape, however, and will face higher taxes, with some exceptions.

Finally, while this bill couldn’t make Social Security payments tax-free due to congressional rules, it did add a targeted tax break in its place — though this change might not matter to high net worth investors. Taxpayers older than 65 or who turn 65 in 2026 could benefit from a flat $6,000 income tax deduction, whether they’re taking Social Security or not. However, this deduction phases out relatively quickly, dropping as adjusted gross income tops $75,000 ($150,000 for couples).

Whatever your situation, take a moment to check in with your financial team.

Whenever the tax landscape changes, it’s worth taking a moment to ensure that you understand how you may be affected and what — if any — changes you should consider.

“Of course you want to understand the new tax policies, and in some cases take advantage of new tax mitigation opportunities,” Geller says. “But you should continue to base your wealth planning on long-term objectives.”

Consider reaching out to your tax advisor and Private Wealth Advisor to make sure your wealth plan addresses the latest rules.