The recently passed One Big Beautiful Bill Act (OBBBA) brings several tax provisions from the 2017 Tax Cuts and Jobs Act (TCJA) into permanent law. While it doesn’t overhaul the tax code, it does cement key elements of how individuals, families, and business owners will plan for income, deductions, and long-term wealth going forward.

But it’s also incredibly dense and not easy to sparse. Here’s some help, in determining what you need to know for your own tax purposes.

Tax Brackets, Standard Deduction, and Estate Exemptions Made Permanent

The OBBBA locks in the individual tax brackets that were originally scheduled to sunset in 2025. The top marginal rate remains at 37%, and income bands across all filing statuses remain widened relative to pre-TCJA levels. For most taxpayers, this results in slightly lower marginal rates than in past decades.

It also makes the increased standard deduction permanent and indexed to inflation:

• $15,750 for single filers
• $23,625 for heads of household
• $31,500 for married couples filing jointly

The practical takeaway: Most taxpayers will continue to take the standard deduction and avoid itemizing, streamlining the filing process. If, however, you can itemize, it means you will need to ensure you’re going above and beyond the standard deduction levels. This means track everything!

In addition, the bill permanently increases the estate, gift, and generation-skipping transfer (GST) tax exemptions to $15 million per person (or $30 million per couple), adjusted for inflation starting in 2026. This eliminates the pressure to make large gifts before the previously scheduled 2025 sunset.

SALT Deduction Cap Expanded—but Still Limited

The State and Local Tax (SALT) deduction cap – which has been a major point of contention since 2018 – has been increased to $40,000 for married joint filers and $20,000 for single filers. This offers some relief to taxpayers in high-tax states, particularly where property and state income taxes regularly exceed the previous $10,000 cap.

However, the deduction is still capped. For many households, especially in urban or coastal areas, the federal deduction won’t fully offset state and local tax burdens, and won’t restore pre-2018 tax dynamics, but it’s a benefit for many on the coasts of the US or higher income household owners.

Implications for the Self-Employed and Small Business Owners

For self-employed individuals and small business owners, the OBBBA offers predictability, but not necessarily simplification.

The bill makes permanent the 20% Qualified Business Income (QBI) deduction, a key provision that lowers taxable income for pass-through businesses like sole proprietorships, partnerships, and S corporations. This gives freelancers, consultants, and practice owners a more stable foundation for tax projections and retirement planning. It’s probably the single most important component for the self-employed.

But the QBI deduction remains complex, with limitations based on industry, income thresholds, and wage calculations. Business owners will still need to carefully plan around these rules to benefit fully. For service-based business owners, it’s really dependent on how much you make.

Medicaid and ACA Changes Could Raise Healthcare Costs

While OBBBA focuses primarily on taxes, it includes significant healthcare implications, particularly for lower- and middle-income households and self-employed individuals who rely on Affordable Care Act (ACA) marketplace coverage or Medicaid.

Key changes include:

• Work or volunteer requirements of 80 hours/month for Medicaid recipients
• More frequent eligibility checks (twice a year instead of annually)
• Reduced federal funding for ACA premium subsidies, phased in over time

For self-employed individuals who depend on ACA plans, this could lead to higher premiums, fewer available plans, or greater out-of-pocket exposure in future years. Since the self-employed can play with their income, they could often reduce their reported income, increasing access to ACA subsidies. This will be more difficult now, and lead to higher health care costs in the future.

Now may be the time to review your health coverage strategy, especially if your income level puts you on the edge of subsidy eligibility.