The Personal Trust Corner: A J.D.’s Perspective

The ‘One Big Beautiful Bill Act (OBBB)’: What You Need to Know

By Amy Piedmont, J.D., LLM, Vice President, Sr. Trust Relationship Manager and
Katherine “Kate” Gambill, J.D., Vice President, Sr. Trust Relationship Manager

In our series, “The Personal Trust Corner: A J.D.’s Perspective,” we aim to respond to the ever-changing Estate Tax Laws. On July 4 of this year President Donald Trump signed the “One Big Beautiful Bill Act (OBBB)” into law, enacting the most sweeping tax reform since the 2017 Tax Cuts and Jobs Act (TCJA). The OBBB makes permanent many TCJA provisions, introduces new tax benefits and implements significant changes for individuals, families and businesses. Below are the key highlights.1 2 3

Estate, Gift and Generation-Skipping Transfer (GST) Tax Exemptions

• Permanent Increase: The OBBB permanently raises the federal estate, gift and GST tax exemptions to $15 million per individual, indexed for inflation starting in 2027. This is a substantial increase from the $13.99 million exemption in 2025, which was previously scheduled to drop to about $7 million in 2026.
  
  
• Planning Opportunity: Clients considering large gifts or trust planning now have more flexibility and less urgency, as the higher exemption will be locked in for the foreseeable future.
  
  

Individual Income Tax Provisions

• Tax Rates: The lower individual income tax rates and brackets established by the TCJA are made permanent. The top individual rate remains at 37%, with inflation adjustments for bracket thresholds.
  
  
• Standard Deduction: The standard deduction is permanently increased to $15,750 for individuals, $23,625 for heads of household and $31,500 for joint filers, with inflation adjustments. There will be a new phase-out for high earners.
  
  
• Child Tax Credit: The child tax credit increases to $2,200 per qualifying child, indexed for inflation, and the refundable portion and higher phaseout thresholds are made permanent.
  
  
• SALT Deduction Cap: The state and local tax (SALT) deduction cap will be temporarily raised from $10,000 to $40,000 through 2029, with a phaseout for incomes above $500,000. The cap reverts to $10,000 in 2030.
  
  
• 529 Plans: The OBBB expands qualified tax-free distributions from 529 plans to include certain tutoring, educational therapies and college admission exams. The annual limit for K-12 tuition is doubled to $20,000.
  
  
• New Deductions: Deductions for tip income (up to $25,000) and overtime pay (up to $12,500 single/$25,000 joint) are introduced for moderate-income workers, with phaseouts for high earners.
  
  
• Senior Deduction: Seniors (age 65 and older) receive a new $6,000 deduction, phased out at higher incomes.
  
  
• Charitable Deductions: For itemizers, a new 0.5% floor applies — charitable donations must exceed 0.5% of adjusted gross income (AGI) to be deductible. Non-itemizers can claim up to $1,000 ($2,000 for joint filers) in charitable deductions. For example, a donor with an AGI of $1,000,000 must donate more than $5,000 to begin receiving any tax benefit. A $4,000 donation would not be deductible, while a $6,000 donation would allow a $1,000 deduction. This provision allows broader participation in charitable giving, even for those who take the standard deduction.1 This change encourages more strategic giving and may prompt high-net-worth individuals to consolidate donations or use donor-advised funds to surpass the threshold.

Business and Corporate Tax Changes: OBBB introduces several permanent and expanded provisions aimed at boosting business investment and innovation:

• Bonus Depreciation: 100% bonus depreciation will be made permanent for qualified property placed in service after January 19, 2025. For example, a manufacturing company purchasing $500,000 in new equipment can deduct the entire amount in the year of purchase, rather than depreciating it over several years.
  
  
• ATI Definition Restored: The Act restores the pre-2022 definition of adjusted taxable income (ATI), allowing businesses to deduct more interest expenses. For example, a company with significant depreciation and amortization can now exclude those amounts from ATI, increasing its deductible interest.
  
  
• Immediate Expense Deductions on Depreciable Equipment: The maximum Section 179 deduction for immediate expense deductions on depreciable equipment will be increased to $2.5 million, with a $4 million phaseout threshold, both indexed for inflation.
  
  
• Qualified Business Income Deduction: The 20% deduction for qualified business income (QBI) from pass-through entities will be made permanent, with expanded phase-in income ranges and a new $400 minimum deduction for those with at least $1,000 in QBI.
  
  
• Research & Experimental (R&E) Expensing: Immediate expensing of domestic R&E expenditures will be permanently reinstated, with an option to amortize certain costs.
  
  
• Qualified Small Business Stock (QSBS): The exclusion for capital gains on QSBS has increased to the greater of $15 million or 10 times the basis, with new tiered holding period benefits (50% exclusion at three years; 75% at four years; 100% at five years.)
  
  
• Opportunity Zones: The Opportunity Zone program will be made permanent, with new zones selected every 10 years and a five-year deferral for qualifying investments. This allows investors to defer gains by investing in designated low-income areas, with new zones selected every 10 years. For example, a real estate investor reinvesting capital gains into an Opportunity Zone fund can defer taxes and potentially eliminate them after a holding period.

These provisions are designed to stimulate investment, innovation and economic development, especially for small- and mid-sized businesses.

Other Notable Provisions

• Trump Accounts: A new federal savings vehicle for children, called “Trump Accounts,” was created. These accounts provide $1,000 in federal seed money for children born between 2025 and 2028, allow annual contributions up to $5,000, and offer tax-deferred growth. Withdrawals are allowed for education, first home, or small business/farm capital, with specific age-based restrictions.
  
  
• Auto Loan Interest Deduction: Up to $10,000 of interest on loans for U.S. assembled passenger vehicles will be deductible, subject to income phaseouts.
  
  
• Tip and Overtime Deductions: New above-the-line deductions have been created for qualified tip income and overtime pay, with caps and income phaseouts.
  
  
• Excise Taxes: The OBBB introduces a 1% excise tax on remittance transfers and increases excise taxes on certain college endowments.
  
  

Provisions Eliminated or Phased Out

• Clean Energy Credits: Several clean energy credits, including those for residential clean energy, commercial clean vehicles and energy-efficient home improvements, are eliminated for property or vehicles placed in service after specified dates.
  
  
• Personal Exemptions: The personal exemption deduction is permanently eliminated.

Most provisions take effect for tax years beginning after December 31, 2025, but some changes (such as the estate tax exemption and certain business credits) have specific effective dates. At Personal Trust, we are happy to review our client’s estate plans, gifting strategies and business structures in light of these changes.

Please reach out to our Senior Trust Relationship Managers: Amy Piedmont, J.D., LLM, Vice President in Pensacola, Florida and Katherine Gambill, J.D., Vice President in Atlanta with any questions or to start a conversation regarding estate planning. We welcome the opportunity to introduce you to how Synovus Trust Company can serve your needs.