President Trump signed the One Big Beautiful Bill into law on July 4, 2025. The legislation ushers in significant changes to the tax code.
Five key provisions offer substantial planning opportunities for families, business owners, and investors across multiple areas of financial planning. What follows are the strategies you need to understand to take advantage of these new tax benefits.
Table of Contents:
The bill doubles the annual K-12 spending limit from $10,000 to $20,000. It expands what qualifies as an eligible expense. Parents can now use 529 funds for tutoring, online education services, and other educational expenses beyond just tuition.
Real-World Impact: Consider a recent client who sold a rental property. They wanted to optimize their newfound liquidity. Both parents front-loaded five years of contributions into 529 plans for each of their two children. That's $190,000 per parent, totaling $380,000. With the new $20,000 annual K-12 limit, they could now cover private school tuition from tax-free growth rather than after-tax cashflow.
This strategy freed up $38,000 annually that they previously paid out-of-pocket for tuition. They redirected it into their retirement savings, addressing a gap in their financial plan.
Grandparents have an additional benefit here. They can use 529 plans as estate planning tools, moving assets out of their taxable estate while funding education for the next generation.
If you own an Airbnb or VRBO property, pay attention. The restoration of 100% bonus depreciation creates massive tax planning opportunities through cost segregation studies. That's up from just 40% in 2025.
The Key Rules:
Why This Matters: Active income classification means you can offset your W-2 wages or business income with depreciation deductions from your rental property. Consider a $1 million beach property.
A cost segregation study can separate the building components onto different depreciation schedules, potentially generating hundreds of thousands in deductions that directly reduce your tax bill.
Capital-intensive businesses got a major win. The return of 100% bonus depreciation applies to equipment and property purchased after January 19, 2025.
What Qualifies:
Strategic Application: If you're having a particularly profitable year, accelerating planned equipment purchases before year-end can dramatically reduce your current tax liability. You can deduct the entire amount in year one. Instead of depreciating a $200,000 vehicle purchase over several years, take the full deduction now.
Manufacturers aren't the only ones who benefit. Professionals across industries can leverage this for vehicle purchases, office equipment, and other business necessities they were planning to buy anyway.
The state and local tax (SALT) deduction cap has increased from $10,000 to $40,000 annually through 2029. Each year brings a 1% adjustment. This change particularly benefits residents of high-tax states like California, New York, Illinois, and New Jersey.
The Martinez Family Example (California):
The Chen Family Example (California):
Important Limitations:
Planning Opportunity: Business owners who can control income timing may be able to stay under the phase-out thresholds and maximize this benefit. Strategies include deferred compensation, retirement plan contributions, and other income-shifting techniques.
The bill introduces a new tax-advantaged investment vehicle specifically designed for children under 18. It offers a head start without the earned income requirements of traditional retirement accounts.
Contribution Limits:
Key Features:
Employer Opportunity: Companies can offer this as an employee benefit while capturing tax deductions. This creates a unique differentiator in competitive talent markets.
Important Note: Trump Accounts won't be available until July 4, 2026. Mark your calendar if you're interested in opening one for your child.
These five provisions represent substantial planning opportunities. They require coordination with your financial advisor and CPA to maximize benefits. Some provisions are temporary (SALT increases sunset in 2029), while others have specific timing requirements or income limitations.
Act strategically. Front-load 529 contributions. Conduct a cost segregation study on rental property. Time equipment purchases carefully. Optimize income to stay below SALT phase-outs. Prepare to open Trump Accounts for your children.
Proper planning can generate significant tax savings.
Don't let these opportunities pass you by. Review your situation with your advisory team to determine which strategies make sense for your specific circumstances.