Trump’s “One Big Beautiful Bill Act” (OBBBA): Tax Planning Opportunities

Trump’s “Big Beautiful Bill” What It Means for Your Wealth

Madrona Financial| Danielle Meister
August 01, 2025•3 min read

President Trump’s newly signed One Big Beautiful Bill Act (OBBBA) is the most sweeping federal tax legislation since 2017. With dozens of provisions, this law presents a wide range of planning opportunities. From expanded estate tax exemptions and tax-free tip income to new retirement strategies and small business incentives, the OBBBA touches nearly every corner of the tax code.

A Golden Opportunity for Roth Conversions
From 2025 to 2028, the OBBBA allows retirees over age 65 to benefit from a powerful—but temporary—tax break: the Senior Bonus Deduction. This extra $12,000 deduction ($6,000 per individual) is added on top of the standard deduction and age-based deduction, bringing total deductions to an estimated $48,300 for eligible couples. To qualify, you must be 65 or older and have Adjusted Gross Income (AGI) under $150,000 for married couples (under $75,000 for single filers) to receive the full deduction.

No Federal Income Tax on Tips? Yes—For Now
The OBBBA gives service industry workers a temporary tax break: from 2025 through 2028, individuals can deduct up to $25,000 of tip income from their federal taxable income. This effectively makes the first $25,000 in tips tax-free for eligible workers—think servers, bartenders, hairstylists, and drivers.

A Bigger, More Permanent Estate Tax Exemption
One of the most impactful provisions is the permanent extension—and expansion—of the federal estate and gift tax exemption. Instead of reverting to $7 million per person in 2026, the new law raises the exemption to $15 million per individual ($30 million per couple, with proper estate planning in place), indexed for inflation.

Capital Gains: No Rate Hike After All
The new law leaves long-term capital gains rates unchanged, keeping the top rate at 20% (plus 3.8% NIIT for high earners). That’s good news for those selling appreciated assets.

Pass-Through Business Owners: QBI Deduction Made Permanent
For small business owners and real estate investors, the bill’s permanent extension of the 20% Qualified Business Income (QBI) deduction is a major win.

What You Should Do Now
Tax laws evolve, but wealth planning is timeless. Whether you’re retired, building a business, or preparing to transfer wealth to the next generation, this legislation brings real opportunities.

DISCLOSURES:
The information, suggestions, and recommendations included in this material is for informational purposes only and cannot be relied upon for any financial, legal or insurance purposes. Madrona Financial Services will not be held responsible for any detrimental reliance you place on this information. It is agreed that use of this information shall be on an “as is” basis and entirely at your own risk. Additionally, Madrona Financial Services cannot and does not guarantee the performance of any investment or insurance product. Insurance products are offered through Madrona Insurance Services, LLC, a licensed insurance agency and affiliate of Madrona Financial Services. Madrona Insurance Services and individual advisors affiliated with Madrona Insurance Services and Madrona Financial Services receives commissions on the sale of insurance products. Clients are not required to purchase insurance products recommended or to otherwise implement financial advice through Madrona affiliates. When we refer to preparation and filing of tax returns, tax returns are prepared and filed by our wholly-owned sister company Bauer Evans, Inc. P.S., a licensed certified public accounting firm. Madrona Financial Services, LLC is a registered investment adviser with the SEC. Our registration with the SEC or with any state securities authority does not imply a certain level of skill or training. Madrona Financial & CPAs is a registered trade name used singly and collectively for the affiliated entities Madrona Financial Services, LLC (“Madrona”) and Bauer Evans, Inc., P.C. (“Bauer Evans”). Investment advisory services are provided through Madrona. CPA services are provided through Bauer Evans. While it's essential to optimize your tax situation, it's equally important to comply with tax laws and regulations. Always ensure that your tax-saving strategies are legal and appropriate for your financial situation.

Danielle is an Investment Advisor Representative, Certified Financial Fiduciary®, and Certified Divorce Financial Analyst® based out of Madrona Financial’s Park City, Utah office. With over a decade of experience in the financial services industry, she executes all aspects of financial planning: investments, alternatives, structured products, insurance, retirement planning, social security, taxation, estate, and legacy planning. Danielle is a nationally recognized advisor with a published training series, Back to Basics, and has been featured on national television on CNBC, ABC, FOX, and PBS. As a former competitive soccer player, Danielle enjoys running and pilates. Her husband, Will, graduated from the Air Force Academy as captain of the Lacrosse team and has gone on to be an H-60 Blackhawk helicopter and Delta pilot. Together, they enjoy hiking, biking, and skiing with their two daughters, Claire and Everly. As a family, they root for their favorite football teams, the Green Bay Packers and Denver Broncos!

Danielle Meister, CFF, CDFA® – Wealth Advisor

Danielle is an Investment Advisor Representative, Certified Financial Fiduciary®, and Certified Divorce Financial Analyst® based out of Madrona Financial’s Park City, Utah office. With over a decade of experience in the financial services industry, she executes all aspects of financial planning: investments, alternatives, structured products, insurance, retirement planning, social security, taxation, estate, and legacy planning. Danielle is a nationally recognized advisor with a published training series, Back to Basics, and has been featured on national television on CNBC, ABC, FOX, and PBS. As a former competitive soccer player, Danielle enjoys running and pilates. Her husband, Will, graduated from the Air Force Academy as captain of the Lacrosse team and has gone on to be an H-60 Blackhawk helicopter and Delta pilot. Together, they enjoy hiking, biking, and skiing with their two daughters, Claire and Everly. As a family, they root for their favorite football teams, the Green Bay Packers and Denver Broncos!

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