10 Key Tax Planning Moves Under the One, Big, Beautiful Bill

What is the One, Big, Beautiful Bill (OBBB)?

Signed into law on July 4, 2025 (Public Law 119-21), the OBBB introduces major permanent and temporary tax changes affecting individuals and businesses for tax years 2025–2028 and beyond. (irs.gov) Its provisions span inflation-adjusted brackets, new deductions, credits, and rules on depreciation, energy credits, and more. (irs.gov)

10 Strategic Moves Every Taxpayer Should Know

1. Max out the 100% additional first-year depreciation Property acquired after January 19, 2025 qualifies for full first-year expensing. That includes certain sound recording productions. If placing property in service in the first tax year after Jan 19, 2025, you may still elect for reduced rates (40% or 60% in special cases). (irs.gov)

2. Take advantage of the standard deduction hike In 2026, the standard deduction jumps to $32,200 for married filing jointly; $16,100 for singles and married filing separately; and $24,150 for heads of household. (irs.gov) Compare your itemized deductions to see if staying with the standard deduction is still optimal.

3. Leverage the new deduction for seniors If you're 65 or older by the end of the year, you may claim an additional $6,000 deduction ($12,000 for couples filing jointly) if your MAGI is up to $75,000 (or $150,000 for joint filers). It phases out past those thresholds. (irs.gov)

4. Understand limits for tip, overtime, and car loan interest deductions

   • Tips: up to $25,000 (self-employed limit is net income from that business); phases out above $150,000 / $300,000 MAGI. (irs.gov)
   • Overtime: deduction for amounts over “regular rate” → up to $12,500 ($25,000 joint) with similar phase-outs. (irs.gov)
   • Car loan interest: for new U.S.-assembled vehicles, up to $10,000 interest per year per loan. (irs.gov)

5. Watch clean energy credits closely—they're expiring Several credits/deductions expire at end-2025 or mid-2026: e.g., Energy Efficient Home Improvement Credit (25C), Residential Clean Energy Credit (25D), New & Used Clean Vehicle Credits (25D, 25E, 45W) all have termination dates ranging from September 30 to December 31, 2025. (irs.gov) Plan big purchases before the cut-off.

6. Form 1099-K change: what triggers reporting The reporting threshold reverts to $20,000 and more than 200 transactions, replacing the previously scheduled $600 threshold. (irs.gov) This matters for side-gigs, online sales, gig economy workers.

7. Health Savings Accounts (HSAs) get more flexible

   • Bronze and catastrophic plans will be HSA-eligible starting January 1, 2026. (eitc.irs.gov)
   • Direct primary care arrangements also become allowed fees payable via HSAs. (eitc.irs.gov)

8. Qualified Opportunity Zones (QOZs): rural projects become more appealing With the OBBB, rural census tracts now qualify as rural QOZs, and the substantial improvement threshold is reduced from 100% to 50% for properties located entirely in rural QOZs. (irs.gov) If investing in real estate in less dense areas, this can yield big benefits.

9. Plan around estate and gift tax adjustment The estate tax exclusion increases for 2026: $15,000,000 per decedent (up from ~$13.99M in 2025). AMT exemption amounts and marginal rates are also indexed. (irs.gov) These require revisiting estate plans and gifting strategy.

10. Use elections wisely and track phase-outs Whether it’s making a transfer election for clean vehicle credits, choosing to take full cost-recovery or opting out in favor of partial depreciation, or tracking whether you exceed a MAGI threshold: elections can make or break the tax outcome. Review eligibility, record election deadlines, and use calculators or tax professional support to compare options.

Practical Examples

• Small manufacturer: buys $500,000 machinery in April 2026 → with 100% bonus depreciation, writes off full cost in first year, instead of spreading cost over years.
• Gig worker: earns $18,000 through payment app, with 150 separate sales transactions – since both thresholds (>$20,000 & >200 transactions) aren’t met, likely no 1099-K issued; but if mindless overshoot happens next year, plan accordingly.
• Senior couple: joint MAGI of $140,000, both age 65+; claim additional $12,000 senior deduction if under income phase-out.

Action Steps

• Review your 2025 income and expenses now to gear up for 2026 filings under OBBB rules.
• Document acquisition dates, contracts, and placements in service for assets or vehicles, especially near expiration dates.
• Check state participation for Scholarship Granting Organization credit (§ 25F) if relevant.
• Use IRS online tools & ensure SSNs and dependent data match official records to avoid delays.

With thoughtful planning, the OBBB presents a historic opportunity for savings and benefits—don’t wait until it’s too late.