A major new tax law, the “One Big Beautiful Bill Act” (OBBBA), was signed on July 4, 2025, and it’s set to change the way you, your family, and your business handle your finances, no matter where you live. Understanding what these changes mean for your wallet is crucial.
At Shah Tax & Accounting Services LLC, our job is to stay ahead of the curve for you. Because this law is brand new, tax professionals are still analyzing the details. As the IRS releases more clarification, specifics may evolve, and we are monitoring every development to provide you with the most current guidance.
This post is the from our new series designed to break down the OBBBA. Think of this as your high-level briefing. In the coming weeks, we will post a deep dive into each of these topics, giving you the in-depth knowledge you need.
Here are the six changes that will have the biggest immediate impact.
1. Personal Exemptions Are Out, a New Senior Deduction Is In
What it means for you: The old strategy of claiming personal exemptions for yourself, your spouse, and your kids is now permanently a thing of the past. To help older Americans, the law includes a brand new, temporary deduction for those 65 and over. For most families, the impact of losing exemptions is softened by other enhancements, like a larger standard deduction and Child Tax Credit.
Key Takeaway: If you’re a senior, this new deduction could be a significant benefit, but it comes with its own set of rules. For everyone else, it’s important to understand that the fundamental math of your tax return has changed.
2. The Child Tax Credit Gets a Permanent Boost
What it means for you: Great news for parents nationwide—the enhanced Child Tax Credit is now a permanent and even more generous feature of the tax code. This provides stable, reliable financial support you can count on year after year as you plan your family’s budget. The one catch? The rules on who qualifies are now stricter.
Key Takeaway: This credit is a powerful tool for reducing your family’s tax bill. A quick check-in with us can confirm you meet the new requirements so you don’t leave any money on the table.
3. Big News for Small Business: The QBI Deduction Is Better Than Ever
What it means for you: If you’re a small business owner, independent contractor, or freelancer, this is a change you need to focus on. The Qualified Business Income (QBI) Deduction—a major tax break for pass-through businesses—is now permanent and has been expanded. More business owners will now qualify for this valuable deduction.
Key Takeaway: The enhanced QBI deduction is designed to help you keep more of your hard-earned money to grow your business. Now is the perfect time to review your tax strategy to ensure you’re taking full advantage.
4. A Major Break on Estate & Gift Taxes
What it means for you: The government has significantly and permanently increased the amount of money you can pass on to your heirs without triggering federal estate or gift tax. This moves the estate tax from a concern for many successful families to a planning issue for only the ultra-wealthy.
Key Takeaway: If you have an existing will or trust, it is likely outdated. This change provides a golden opportunity to revisit your estate plan to protect your assets and ensure your legacy is passed on efficiently and with minimal tax.
5. The SALT Cap Is Changing (For Now)
What it means for you: For anyone who pays high property and state income taxes — the State and Local Tax (SALT) deduction cap has been a source of frustration. The OBBBA provides some temporary relief by raising the cap. This means, for a limited time, you may be able to deduct more of your state and local taxes.
Key Takeaway: The key word here is temporary. We can help you maximize the benefit now while also planning for the cap to revert in the future. For residents of high-tax states, strategic timing of tax payments could be very important.
6. A Temporary Tax Break on Tips and Overtime
What it means for you: In a direct boost to workers in service, hospitality, and many other industries, the new law temporarily makes a portion of tip and overtime income tax-free. This is a significant, but limited-time, opportunity to increase your take-home pay.
Key Takeaway: Record-keeping is now more important than ever. To benefit from this tax break, you need to track your overtime and tip income meticulously. Let us show you how to do it right so you can legally pocket the extra cash without worrying about the IRS.
The Big Picture: What This All Means
So, what are the major themes of this new tax act? When you zoom out, the law aims to achieve a few key things for individual taxpayers:
- Certainty and Simplicity: Many popular tax breaks that were temporary are now permanent. This provides stability for long-term financial planning and means more people can use the simpler standard deduction instead of itemizing.
- Targeted Relief: The law delivers enhanced credits and deductions specifically designed to help families, seniors, and small business owners.
- Temporary Opportunities: Be aware that some of the best new benefits, like the SALT cap increase and the tax break for tips, are temporary and require careful planning to maximize.
- Critical Compliance: The new rules come with stricter requirements, like the SSN rule for the Child Tax Credit. Attention to detail is crucial to ensure you get the benefits you’re entitled to.
Don’t Wait to Plan for These Changes
The OBBBA is complex, and new guidance is still being released. Trying to navigate it alone could mean missing out on major savings or making a costly mistake.
This is where Shah Tax & Accounting Services LLC can provide immediate value. We translate these new laws into a clear, actionable strategy tailored to your specific financial situation, whether you’re down the street or across the country. Contact us today for a consultation to get ahead of the curve and ensure you are positioned for success in this new tax environment.
Contact Shah Tax & Accounting Services LLC Today! Give us a call at (732) 796-4005, email or us at info@shahaccounting.com.
Disclaimer: This information is for general informational purposes only and not intended as tax, legal, or accounting advice. Tax laws are complex and subject to change. Please consult a qualified professional for advice tailored to your specific situation.
Previous
