High-net-worth individuals have faced significant uncertainty on many of the tax reductions in the TJCA which was passed in 2017.
The “One, Big, Beautiful Bill” (OBBB) makes permanent many key tax provisions.
This article explores how these enduring changes create exceptional opportunities for tax reduction across estate planning, business ownership, and real estate investment—and why timely implementation is crucial.
Table of Contents
- Income tax changes that benefit affluent taxpayers
- Estate planning opportunities under the new legislation
- Incentives for capital investment, real estate, and equity growth
- Strategic benefits for business owners
- Real estate investment and opportunity zone enhancements
- Charitable giving strategies under the new law
- Implementing tax strategies effectively
- Working with tax professionals to maximize benefits
- Securing your future under the new tax landscape
Income tax changes that benefit affluent taxpayers
The One, Big, Beautiful, Bill (OBBB) locks in the 37% top marginal rate indefinitely. While a 2.6 percentage point difference from the alternative 39.6% rate might not sound dramatic, it translates into substantial annual savings for high-income earners.
The legislation also preserves existing tax benefits that many saw as temporary. To deliver long-term certainty for effective tax planning, the bill maintains the lower individual tax brackets and enhances standard deductions from the 2017 Tax Cuts and Jobs Act.
For affluent (though not very high earners) taxpayers in high-tax states like California, New York, and New Jersey, the SALT deduction cap increases to $40,000 (for married filers or $20,000 for single filers) with phaseouts at $500,000. This quadrupled cap, available through 2029, represents a material savings, albeit for a temporary period, for many residents of these states.
Private equity professionals and hedge fund managers can breathe easier knowing the OBBB maintains favorable tax treatment for carried interest. This preservation acknowledges the investment industry’s role in capital formation. Entrepreneurs and early-stage company investors received a big win with the expansion of the QSBS provision.
For more sophisticated investors, the legislation gives further certainty by safeguarding favorable tax treatment for private placement life insurance (PPLI), private placement variable annuities (PPVA), and the exclusion of a proposed international surtax further streamlines tax planning for global investors.
Estate planning opportunities under the new legislation
Estate planning is a major component of the OBBB. It includes a dramatic expansion of the federal estate and gift tax exemption. At $15 million per individual—effectively $30 million for married couples, this inflation-adjusted exemption starting January 2026 completely transforms generational wealth transfer strategies.
Over the last 25 years, many wealthy families have rushed to complete significant gifts before various tax provisions sunset. This new, permanent exemption increase eliminates that pressure. Instead of racing against the clock, you have more time to develop thoughtful, strategic approaches to multi-generational wealth transfer.
For those familiar with sophisticated estate planning techniques, the expanded exemptions are helpful for more complex structures. GRATs, CLATs, and dynasty trusts become even more powerful vehicles for transferring wealth while minimizing tax exposure.
Ultra-high-net-worth families face an unprecedented opportunity to remove substantial assets from future estate tax exposure, creating lasting benefits for generations to come.
Incentives for capital investment, real estate, and equity growth
The OBBB’s restoration of 100% bonus depreciation marks a major shift in investment strategy. Starting January 19, 2025, this provision dramatically enhances the appeal of capital-intensive investments by offering immediate write-offs for qualified property placed in service.
Real estate investors find themselves particularly well-positioned. The permanent reinstatement of EBITDA-based limitations on interest expense deductions:
- Increases upfront deductibility.
- Creates more favorable conditions for leveraged real estate investments.
While enhanced investment depreciation encourages upfront capital spending, the OBBB also rewards equity risk-taking through expanded QSBS benefits. Together, they create a powerful incentive mix for both asset-heavy and high-growth investment strategies.
Early-stage investors will see especially large gains with Qualified Small Business Stock (QSBS) updates. Most notably, investors will benefit from the new three-year partial exclusion timeline, coupled with an increased exclusion cap of $15 million.
These QSB updates will enable faster and larger tax-free exits, making startup equity significantly more attractive for early backers, as well as founders and employees.
In terms of wealth transfer, investors can now strategically leverage these enhanced QSBS benefits through gifting and trust planning, creating even more opportunities for tax-efficient generational wealth management.
The permanent extension of the Section 199A pass-through deduction at 20% maintains favorable tax treatment for business income, offering significant advantages for business owners compared to traditional wage earners.
Strategic benefits for business owners
For business owners, the immediate expensing of domestic R&D expenditures (research and experimental costs such as product development, testing, and innovation-related activities) offers a tremendous improvement. Gone are the days of spreading these costs over a five-year period. Now, these investments can be deducted immediately, significantly reducing your current-year tax burden.
The enhanced interest expense deduction creates especially favorable conditions for leveraged business structures. New possibilities have opened up for debt-financed acquisitions and expansions. This could transform how investors approach new growth strategies.
Family offices that invest in R&D-intensive sectors (such as biotech, SaaS, or advanced manufacturing) can now fully deduct domestic research expenses in the year they’re incurred, rather than amortizing them over five years. This front-loaded deduction reduces current-year taxable income, enhancing both cash flow and after-tax returns.
Looking at business losses, the law extends and modifies limitations on excess business losses (EBLs) while maintaining an important safety valve: disallowed losses can convert into net operating losses carried forward indefinitely. When facing temporary setbacks, businesses can rely on this provision for significant flexibility.
For U.S.-based multinational companies, the legislation establishes a permanent framework for international business income. While some rates do increase, the reduction in double taxation creates a more predictable, manageable environment for global operators.
Real estate investment and opportunity zone enhancements
The permanent expansion of Opportunity Zones (OZ) introduces a new era for tax-advantaged real estate investment. With recurring 10-year designations, investors gain an extended timeline for strategic property acquisitions and development projects.
The OBBB significantly enhances basis step-up benefits. For qualifying investments held at least five years, OZ funds now receive a 10% step-up in basis, while rural Opportunity Zone investments benefit from a more generous 30% step‑up—offering materially improved tax outcomes.
When paired with the return of 100% bonus depreciation, enhanced OZ benefits give real estate investors a rare opportunity for immediate write-offs on new investments and long-term savings through basis step-ups and deferred gains. Investors gain a high-impact strategy with both immediate and long-term benefits.
Capital gains deferred under the original Opportunity Zone program must be recognized by December 31, 2026. With no further extensions, investors should act now to evaluate liquidity options, tax-loss harvesting, or other reallocation strategies to mitigate potential tax liability.
Charitable giving strategies under the new law
The “One, Big, Beautiful Bill” (OBBB) also establishes new charitable giving incentives by extending benefits to non-itemized filers.
For high-net-worth individuals with philanthropic intentions, more planning is required. Donor-advised funds, appreciated security transfers, and strategic gifts to qualified organizations take on renewed importance in comprehensive tax planning. Single taxpayers can now claim a $1,000 charitable deduction without itemizing, a helpful provision that democratizes the tax benefits of philanthropy. However, there is a new 0.5% floor on charitable deductions and a cap on the tax bracket of the deduction value at 35%.
Private foundations will now pay a tiered excise tax on their investment income instead of the flat 1.39% rate.
Foundations with assets under $50 million remain at 1.39%, but rates increase to:
- 2.78% for $50–$250 million in assets
- 5% for $250 million–$5 billion in assets
- 10% for those with assets exceeding $6 billion
Foundation management strategies will, inevitably, shift given these new brackets.
Implementing tax strategies effectively
January 1, 2026 looms large as the effective date for many key provisions of “The One Big, Beautiful Bill” (OBBB). Now through 2025, investors, planners, and high-net-worth individuals have a long runway to maneuver their finances for the most tax-efficient outcomes.
Because the expanded SALT deduction cap is temporary and scheduled to revert to $10,000 after 2029, there is a limited window to take full advantage. For clients in high-tax states, this makes residence planning a timely and potentially high-impact strategy over the next few years.
Now is the ideal moment to conduct a comprehensive review of your investment portfolio, estate plan, and tax strategy. See advisory services to learn how qualified advisors can help navigate these complex changes.
Working with tax professionals to maximize benefits
The intricacy of these new tax provisions demands a coordinated approach to craft the best path forward to maximize benefits while maintaining compliance. With a permanently altered tax landscape, now is the time to revisit old plans for fresh perspectives.
Business owners face particularly complex decisions regarding entity structures, compensation strategies, and investment timing. New legislation has created overlapping tax benefits that require expert insights to navigate.
When seeking comprehensive wealth management solutions in the Age of OBBB, high-net-worth families can especially benefit from expert advisory services. Professional guidance is essential to navigate these expanded opportunities.
Securing your future under the new tax landscape
The bottom line is that the “One, Big Beautiful, Bill” (OBBB) creates unprecedented opportunities for you to protect and grow your wealth. But maximizing these benefits requires more than following news headlines and #FinTok influencers. It demands proactive, strategic financial planning backed by professional, credentialed expertise.
The window for implementing optimal strategies will not remain open indefinitely. Connect today to develop a timely, customized approach that reaps the bill’s full benefits.
Don’t wait for the window to close. The “One Big Beautiful Bill” could reshape your financial future—but only if you act now. Work with a dedicated advisor to create a custom strategy that aligns with your goals, protects your wealth, and maximizes every opportunity this legislation offers. Start your personalized tax plan with Harness today.
Disclaimer
Tax related products and services provided through Harness Tax LLC. Harness Tax LLC is affiliated with Harness Wealth Advisers LLC, collectively referred to as “Harness Wealth”. Harness Wealth Advisers LLC is a paid promoter, internet registered investment adviser. Registration does not imply a certain level of skill or training. This article should not be considered tax or legal advice and is provided for informational purposes only. Please consult a tax and/or legal professional for advice specific to your individual circumstances. This article is a product of Harness Tax LLC.
Content was prepared by a third-party provider and not the adviser. Content should not be regarded as a complete analysis of the subjects discussed. Although we believe the content is reliable, it is not guaranteed as to accuracy and does not purport to be complete nor is it intended to be the primary basis for financial or tax decisions.