The One Big Beautiful Bill Act (OBBBA) changes several federal rules that matter for 2026 filings. Signed in 2025, it permanently updates many tax provisions starting in 2026. Here is what higher-net-worth filers should put on the planning list.

What Is The OBBBA?

The One Big Beautiful Bill Act (OBBBA) changes the U.S. tax code in several places that affect individuals, business owners, and estates. The law was signed in 2025. Many of its permanent updates apply beginning in 2026.

Key Changes For High-Net-Worth Filers

1. TCJA Provisions Are Now Permanent

Lower individual rates, the 20% QBI deduction under §199A, and higher standard deductions are permanent under the new law. That removes the scheduled sunset that had been hanging over those TCJA items.

2. 100% Bonus Depreciation Is Back

Section 168(k) bonus depreciation is 100% again, permanently, for qualified property acquired after January 19, 2025. Property acquired under a binding contract signed before that date stays on the old phase-down. California allows no bonus depreciation, so the state return depreciates the same property over its regular life.

3. SALT Cap Raised To $40,000

The state and local tax deduction cap went from $10,000 to $40,000 for 2025 and is $40,400 for 2026, rising 1% a year through 2029 before it drops back to $10,000 in 2030. The cap is reduced by 30% of MAGI above $505,000 for 2026 ($500,000 for 2025), but never below $10,000. Married filing separately gets half. The larger cap only helps if you itemize and have enough eligible SALT. Property taxes on rentals go on Schedule E and aren't subject to the cap.

4. Standard Deduction At $32,200 (MFJ)

The standard deduction for married filing jointly reaches $32,200. Itemize only when your allowable itemized total exceeds that amount for your filing status.

5. Estate Tax Exclusion At $15 Million

The federal estate and gift tax exclusion is $15 million per person for 2026, or $30 million for a married couple using portability. OBBBA made that level permanent and indexes it for inflation after 2026. There's no scheduled sunset now, but Congress can change it, so plan around your actual estate size and California property tax exposure rather than a deadline.

6. New Deductions For Tips, Overtime, And Auto Loan Interest

For 2025 through 2028, new deductions cover qualified tips (up to $25,000) and the premium part of qualified overtime pay (up to $12,500, or $25,000 on a joint return). Both phase out above $150,000 of MAGI ($300,000 joint). You can also deduct up to $10,000 of interest on a loan for a new, U.S.-assembled personal vehicle, phasing out above $100,000 of MAGI ($200,000 joint). All three are taken whether or not you itemize. They reduce taxable income, not AGI, and at the income levels this article is written for they're usually phased out.

What This Means For Your 2026 Return

These changes shift the modeling for 2026, not only the headline rates. Compare the standard deduction with itemizing, test SALT under the new cap and phaseout, and review bonus depreciation, QBI, and estate exposure against your actual assets and income. Start the 2026 plan early enough to change elections and timing while you still can.

Schedule a 2026 tax strategy review with LaviCPA. Call 323-463-2600 or book at calendly.com/lavicpa/30min