Michele Martin heads the wealth management practice at EisnerAmper and is the president of Prosperity. She shared with Checkpoint her wealth planning strategies and best practices for individuals and business owners before provisions of the One Big Beautiful Bill Act (OBBBA) take effect next year.
Estate and GST Tax Exemption
The OBBBA increases the federal estate and gift tax exemption to $15 million per individual, effective for estates of decedents dying and gifts made after December 31, 2025. This new threshold, indexed for inflation, replaces the previous $5 million baseline and the temporary $10 million threshold set by the Tax Cuts and Jobs Act.
The generation-skipping transfer (GST) tax exemption also rises to match the estate tax exemption, providing additional flexibility for legacy planning.
“It’s indexed with inflation, which is always good to know that it isn’t just static,” Martin said.
While some may view the increase as modest, for ultra-high-net-worth families, especially those with family businesses, Martin emphasized that getting “a business valuation and taking advantage of the additional exemption can be really meaningful, especially when combined with potential discounts for legacy planning.”
Of the GST exemption increase, she said the “certainty” the change provides, as well as “the ability to have higher exemption amounts,” afford taxpayers “more flexibility.” Taxpayers can now proceed confidently with reevaluating their estate plans after a period of uncertainty around Tax Cuts and Jobs Act extenders.
Martin stressed the importance of working with experienced estate planning attorneys, especially for business owners seeking to maximize the new exemption levels.
Qualified Business Income & Stock
The Act makes permanent the 20% qualified business income (QBI) deduction, with a minimum deduction of $400 and a requirement of at least $1,000 in QBI to claim it. The phase-in threshold rises to $75,000 for single filers and $150,000 for joint filers, with inflation adjustments after 2026.
The qualified small business stock (QSBS) gain exclusion also expands, reaching 100% for stock held at least five years, with a per-issuer limit of $15 million and an aggregate gross assets test of $75 million, both indexed for inflation.
With the QBI deduction now permanent, business owners looking to plan ahead will have more assurance and stability, according to Martin. Increased phase-in thresholds “will capture a lot of small business owners and give them the opportunity to have that deduction.”
Regarding the QSBS exclusion, Martin said the stock exemption is a critical planning opportunity. “I’ve seen it play out in a powerful way for legacy planning, where you can fund generation-skipping trusts and take advantage of the exemption, with that basis intact.”
Business owners often use this provision “in tandem with the sale of their company, or a portion of the sale, to establish trusts and fund those trusts with stock before the transaction occurs.” This is “a powerful way to transition business proceeds in a tax-efficient manner to the next generation while planning for a liquidity event,” she explained.
These permanent enhancements will embolden companies and business owners by giving them the confidence to “make plans, invest, and do the work they need to do,” said Martin. “Knowing those provisions will remain in place … that promotes growth over time.”
SALT Cap The new law raises the state and local tax (SALT) deduction cap to $40,000 for 2025, $40,400 for 2026, and indexes it for inflation through 2029. The deduction phases out for taxpayers with modified adjusted gross income over $500,000 in 2025, with the threshold increasing in later years.
For high-income taxpayers, the cap is reduced by 30% of the excess over the threshold, but cannot fall below $10,000. The cap reverts to $10,000 beginning in 2030.
Known as the “snap back” provision of the OBBBA’s changes to SALT, the $10,000 reversion will not be indexed for inflation. Taxpayers should be mindful of timing and the gross income tiers, Martin suggested. “If you’re a high earner in the [$650,000 to over $1,000,000] range, a lot of these exemptions phase out.”
She noted that for many taxpayers, the decision to itemize or take the standard deduction becomes more complex with these changes, especially given the phase-outs for higher incomes and the interplay with other deductions.
Charitable Contributions
The Act imposes a 0.5% of adjusted gross income (AGI) floor on individual charitable deductions and a 1% floor for corporations, effective for tax years beginning after December 31, 2025.
The 60% AGI ceiling for cash gifts to public charities becomes permanent. Non-itemizers can claim an above-the-line deduction up to $1,000 ($2,000 for joint returns) for cash contributions to public charities.
Martin illustrated these changes in the following example: “[I]f your AGI is $250,000, your floor is $1,250 for a contribution; if you make $500,000 as a couple, the floor is $2,500 you have to give for it to be eligible.”
Also worth noting is the new provision allowing taxpayers to “deduct $2,000 above the line if you’re taking the standard deduction.”
For those planning on giving charitable donations or funding a donor-advised fund, Martin recommends grouping “those contributions every other year or every third year to get more benefit from the deduction.”
But she stressed that philanthropic decisions should be driven by genuine intent, not just tax incentives. “Make sure what you’re doing isn’t just because it’s deductible,” said Martin. “Do it because you really feel compelled to give.”
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