With President Donald Trump’s signature on the One Big Beautiful Bill Act (OBBBA), the federal government has provided some much-desired consistency around the direction of tax policy. The sprawling bill has so many components and areas of impact that it’s worth looking at how it may impact different categories of investors. Below is a summary of some of the changes and provisions of the bill.

All taxpayers: Permanent income tax cuts

A chief question surrounding the bill was whether expiring income tax cuts enacted in the Tax Cuts and Jobs Act (TCJA) of 2017 would be renewed or would expire at the end of 2025. The OBBBA affirmed that current income tax brackets and rates will no longer have an expiration date. Tax changes in the bill take effect immediately and marginal income tax rates will continue to top out at 37%.

“The looming date when those tax rates would go away is now gone,” says Anne Gifford Ewing, a senior trust, estate and fiduciary strategist with Capital Group Private Client Services. “It’s permanent in the sense that it would take another act of Congress to change the law.”

High net worth investors: Estate tax clarity

The bill also made permanent and even increased the lifetime gift and estate tax exemption, which is the amount you can give away or pass on to heirs before incurring estate and gift taxes. That exemption is already historically high and will increase from $13.99 million for individuals this year to $15 million in 2026 and be indexed for inflation in future years.

Maintaining those high exemptions 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 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.”

“High tax” states: Higher cap on deductions

The state and local tax (SALT) deduction cap was significantly increased, from $10,000 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 in 2029, reverting the SALT cap on deductions to $10,000. All of these amounts will be indexed for inflation in future years.

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 them. After the TCJA passed 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.

Small business owners: Favorable treatment of income and expenses

Changes intended to boost small businesses contain 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 small business owners 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, creating additional planning opportunities for certain company founders and others who may hold QSBS.

Those saving for education: An expanded approach to 529s

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.

What’s not in the bill

Sometimes, what’s not included is as important as what is. One particularly contentious rule, the ominous sounding “revenge tax,” was cut from the initial House version. It would have taxed U.S. assets held by some overseas investors and businesses, including Americans living abroad. This 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 rates 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, 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).

A good time to review your plan

Whenever the tax landscape changes, it’s important to work with your financial professionals to ensure 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.”