The recently passed legislation, informally known as the “One Big Beautiful Bill”, has introduced a series of sweeping tax changes, creating new planning opportunities for individuals, families, and business owners. While the headlines have focused on broader economic implications, the real story for our MPPL Financial clients lies in the short- and long-term strategies now available to reduce taxes, grow wealth, and protect your estate. Scott Wallschlaeger, CFP® MPPL Financial CEO and Brian Resch, CRPS® MPPL Financial Managing Partner offer seven planning opportunities you need to know about:
1. A Golden Window for Roth Conversions
“One of the most compelling opportunities created by the new bill is a multi-year window for executing strategic Roth conversions at potentially lower tax costs,” says Wallschlaeger. There are several key factors making Roth conversions attractive now:
- Stable, lower tax brackets: The bill makes the current lower tax rates “permanent,” though this realistically means they are likely to remain in place for the next 4–5 years.
- Higher SALT deduction caps: The deduction limit for state and local taxes (SALT) has increased from $10,000 to $40,000 for households earning under $500,000. This enhanced deduction phases out between $500,000 and $600,000 of AGI.
- Expanded standard deductions for retirees: Individuals 65 and older can now claim an additional $6,000 deduction (phased out above $150,000 AGI), which helps offset the tax impact of Roth conversions.
WHY THIS MATTERS
If you’re between 60 and 73 (before RMDs begin), these tax breaks can reduce the cost of converting pre-tax retirement accounts to Roth IRAs. Converting now can lower your future required minimum distributions (RMDs), minimize your lifetime tax burden, and shield heirs from higher taxes.
CAVEATS TO CONSIDER
- Roth conversions increase AGI, which can affect Medicare premiums (IRMAA), Social Security taxation, and capital gains tax exposure.
- These strategies are most effective for clients under the $500K income threshold.
2. Enhanced Deductions for Business Owners
“If you own a business, this may be one of the most favorable tax environments we’ve seen in years”, says Resch. The One Big Beautiful Bill reinstates and expands several key provisions:
- 20% QBI Deduction Made Permanent: The Qualified Business Income deduction remains in place for pass-through entities (S corps, partnerships, LLCs), though limitations remain for specified service industries (e.g., law, consulting, financial services).
- 100% Bonus Depreciation (Permanent): Immediate expensing of equipment, property, and other capital investments.
- Full Expensing of Domestic R&D: Business owners can now fully deduct domestic research and development costs in the year they’re incurred.
STRATEGIC NOTE
Pass-through business owners should review whether they can benefit from the Pass-Through Entity (PTE) tax workaround to bypass SALT caps by paying state taxes through the business, rather than individually.
3. Estate Planning: Act Now, While the Window Is Open
The federal estate tax exemption is now permanently increased to $15 million per individual ($30 million per couple), indexed for inflation. “But “permanent” in Washington is often temporary”, reminds Wallschlaeger.
PLANNING CONSIDERATIONS
- If your estate may exceed the current exemption in the future, now may be the time to act.
- Strategies like Spousal Lifetime Access Trusts (SLATs) offer a way to remove assets from your taxable estate while maintaining access to funds through your spouse.
- Other advanced options include intentionally defective grantor trusts (IDGTs) and generation-skipping trusts (GSTs).
“By locking in the current exemption, you hedge against future legislative changes that may lower the threshold,” explains Wallschlaeger. “We encourage you to speak with your estate planning attorney to discuss the best strategies for your situation.”
4. The “Trump Account”: A New Tax-Free Vehicle for Kids
A new, long-term savings tool called the “Trump Account” allows families to set aside up to $5,000 per child per year (plus up to $2,500 in employer contributions) into a low-cost, broad-market investment account. Growth and withdrawals are tax-free if funds are withdrawn after age 18.
WHY IT MATTERS
- More flexible than 529s—funds can be used for any purpose.
- Not counted against parents’ assets in financial aid formulas.
- Contributions are not deductible, but the tax-free growth can compound significantly over time.
ADDED BONUS
- A $1,000 refundable tax credit is available for Trump Accounts opened for babies born between 2025 and 2029.
5. New Auto Loan Interest Deduction
A niche, but valuable, opportunity is now available as a result of the OBBB. This is a new above-the-line deduction of up to $10,000 in auto loan interest. It is available from 2025–2028 for new, U.S.-assembled vehicles used for personal purposes.
INCOME LIMITS APPLY
- Phased out above $100,000 for singles and $280,000 for joint filers.
6. 529 Plan Flexibility Expanded
“The bill further enhances the flexibility of 529 college savings plans”, explains Resch:
- Expanded K-12 use: $10,000/year can now be used for curriculum, online learning, tutoring, testing, and even education-related therapy—not just tuition.
- Vocational training: 529s can now be used for non-college programs like bootcamps, trade certifications, or technical diplomas.
- Roth rollover option: Unused 529 funds can now be rolled into a Roth IRA for the beneficiary, reducing the risk of “trapped” education funds.
7. Sunsetting Green-Energy Incentives
Clients considering green-energy investments should note that many incentives are being phased out:
- EV tax credits end September 30, 2025
- Home energy efficiency credits expire December 30, 2025
- Commercial energy efficiency deductions phase out by June 30, 2026
- Clean energy credits begin phasing out in 2027–2029
“If you’re already planning projects or purchases, completing them on time will be critical to capturing available credits,” says Wallschlaeger.
Looking Ahead: What This Means for the Economy
In the near term, the One Big Beautiful Bill appears stimulative. Expanded deductions, bonus depreciation, and lower taxes could boost consumer and business spending. However, many provisions begin to phase out after 2028, and future cuts to Medicaid and green-energy programs may weigh on long-term economic growth.
As always, tax laws are subject to change. “The strategies we’ve outlined here are based on current legislation, and the assumption that planning early gives you more control and better outcomes”, says Wallschlaeger.
Next Steps
If you believe you may benefit from any of these new provisions; whether through Roth conversions, estate planning, business tax strategies, or long-term savings for your family—please reach out directly to your MPPL Financial Advisor. We’re here to help you evaluate which opportunities make sense for your goals and build a proactive plan while this window remains open.
Please note: Midwest Professional Planners, LTD is neither an attorney nor an accountant, and no portion of this content should be interpreted as legal, accounting or tax advice.