Key Takeaways

• The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, permanently extends key provisions of the Tax Cuts and Jobs Act.
• The federal estate and gift tax exemption remains high and will rise to $15 million per person starting January 1, 2026, with no sunset.
• The generation-skipping transfer tax exemption is aligned with the estate and gift tax exemption, simplifying multigenerational planning.
• Top marginal income tax rates and capital gains tax structures from the TCJA are now permanent.
• The law introduces new planning considerations, including enhanced standard deductions, the repeal of the personal exemption, and the new “Trump Account.”

Douglas Charney brings a background in military leadership and financial management to his analysis of federal tax policy changes. His experience spans active-duty service in the US Army, continued roles in the National Guard and Army Reserves, and senior leadership within the wealth management industry. This combination of strategic planning and financial oversight positions Douglas Charney to objectively assess how the One Big Beautiful Bill Act reshapes long-term estate, gift, and income tax considerations. Through decades of advising individuals and families, he has focused on disciplined decision-making, risk management, and long-range planning.

His professional path reflects sustained engagement with regulatory change, investment strategy, and fiduciary responsibility, all of which are directly relevant to understanding the scope and practical impact of the One Big Beautiful Bill Act Tax and Exemption Changes.

One Big Beautiful Bill Act Tax and Exemption Changes

Enacted on July 4, 2025, the One Big Beautiful Bill Act (OBBBA) overhauls the Internal Revenue Code of 1986. It extends and makes permanent key provisions in the Tax Cuts and Jobs Act of 2017 (TCJA) that would have expired at the end of 2025.

The TCJA doubled the federal estate and gift tax exemption from $5 million to $10 million. The TCJA’s sunset provision was set to bring the exemption back to its 2017 level of $5 million (indexed for inflation). With inflation factored in, this would have been around $7 million, taking effect on January 1, 2026. Uncertainty over the exemption and its potential rollback led many families to pursue a “use it or lose it” strategy, aggressively gifting assets and setting up special trusts to lock in the higher exemption level.

With OBBBA in effect, the inflation-indexed exemption remains at $13.99 million per person in 2025. Individuals may gift up to this amount during their lifetime or after passing, without being liable for federal estate or gift taxes. The exemption for couples is double the amount, $27.98 million.

Commencing on January 1, 2026, the estate and gift tax exemption will be $15 million, with inflation indexing starting in 2027 and no sunset provision. The $15 million amount aligns precisely with the generation-skipping transfer tax exemption, which applies to transfers to “skip” persons, such as grandchildren, simplifying multigenerational wealth transfers. Any estate amounts beyond the exemption are subject to a 40 percent federal estate tax rate, which remains unchanged.

Moreover, the OBBBA makes the TCJA top marginal tax rate of 40 percent permanent. It was scheduled to sunset back to the pre-TCJA 39.6 percent rate at the beginning of 2026. For individual single taxpayers earning more than $640,600, the top tax rate stays unchanged at 37 percent ($768,700 for married couples filing jointly). Also permanently retained is the capital gains rate structure. As of January 1, 2026, a 15 percent rate applies to individual single taxpayers who earn $49,451 or more, and a 20 percent rate applies to individual single taxpayers who earn $545,500 or more.

The personal exemption is now permanently repealed, while the standard deduction increase has been enhanced and permanently extended. Key beneficiaries are taxpayers 65 years of age and older, who gain an additional $6,000 deduction. As with the estate or gift tax exemption, this will be inflation-indexed starting in 2027.

A new benefit commencing in July 2026 is the so-called “Trump Account.” This federal tax-deferred savings vehicle provides children born from January 1, 2025, to December 31, 2028 (and holding a valid Social Security number) with a $1,000 one-time government contribution. Individuals may contribute up to $5,000 annually to such accounts, and employers may contribute up to $2,500 annually. Funds in tax-deferred, non-deductible accounts cannot be distributed before age 18; after that, they operate much like a traditional IRA.

Individuals should go into depth of the OBBBA with a trusted financial advisor, as it also includes changes to the qualified business income (QBI) deduction, 529 education plans, and the state and local tax (SALT) deduction cap.

FAQs

Who is Douglas Charney?

Douglas Charney is a financial services professional and former US Army officer with extensive experience in wealth management and leadership. He has advised individuals and families for decades on long-term financial planning, risk management, and investment strategy.

What is the One Big Beautiful Bill Act?

The One Big Beautiful Bill Act is a 2025 law that permanently extends and modifies key provisions of the Tax Cuts and Jobs Act of 2017. It removes the uncertainty created by the prior sunset provisions that were scheduled to take effect in 2026.

What is the new estate and gift tax exemption?

Starting January 1, 2026, the estate and gift tax exemption will be $15 million per person, with inflation indexing beginning in 2027. Amounts above the exemption remain subject to a 40 percent federal estate tax.

How does the law affect income and capital gains taxes?

The OBBBA makes the TCJA’s top marginal tax rates permanent and keeps the current capital gains tax structure in place. This removes the scheduled reversion to higher pre-TCJA tax rates.

What is the “Trump Account”?

The “Trump Account” is a new federal tax-deferred savings account for certain children born between 2025 and 2028 that includes a one-time government contribution. The account works similarly to an IRA after age 18 and allows ongoing contributions from individuals and employers.

About Douglas Charney

Douglas Charney is a financial services professional and former US Army officer with experience spanning active duty, the National Guard, and the Army Reserves. He later built a career in wealth management, advancing through senior leadership roles and serving as president of Charney Investment Group. His background includes strategic training, investment management, and ongoing involvement in professional and academic advisory boards.