5 actions to consider following enactment of the new U.S. tax law

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025.¹ The OBBBA permanently extends many provisions of the 2017 Tax Cuts and Jobs Act (TCJA) that were scheduled to expire at the end of 2025, and enacts numerous other Congressional Republican and Trump administration tax policy priorities.

Most of the tax changes introduced by the OBBBA are taxpayer friendly. Some are not. Either way, changes effective either now or on January 1, 2026, may present an opportunity for planning.

Speak with your J.P. Morgan team about which actions may be right for you. The team can work with you and your tax advisor to help identify the steps you can take that would be well suited for your situation and to help you achieve your long-term goals.

Now that the OBBBA has been enacted, here are five actions to consider.

 Maximize charitable giving in 2025

Donors should consider front-loading charitable deductions in 2025 to maximize deductibility before new limitations on charitable deductions take effect. The OBBBA introduces two new “haircuts” that apply to charitable donations made on or after January 1, 2026:

• 0.5% charitable deduction floor: This haircut reduces a taxpayer’s total allowable charitable deduction by 0.5% of adjusted gross income (AGI) for those who itemize.
• Overall limitation on itemized deductions: This caps the value of itemized deductions (e.g., charitable contributions, mortgage interest, investment interest paid, etc.) at 35% for taxpayers in the 37% tax bracket.

What does this mean? All else being equal, a charitable contribution made by a top-income bracket taxpayer in 2025 would be more valuable than the same contribution made in 2026.

Review your charitable giving strategy for 2026 and beyond

Starting in 2026, donors may want to “bunch” charitable donations by consolidating multiple years’ worth of planned charitable gifts into a single year to ensure the gift exceeds the 0.5% charitable deduction floor amount.

Donors may also want to reevaluate the economics around donating via a qualified charitable distribution (QCD) from their IRAs. In general, individuals must recognize distributions from traditional IRAs as income. However, IRA owners who are age 70.5 and older can make tax-free distributions that count toward Required Minimum Distributions directly from their IRAs to qualifying charitable organizations of up to $108,000 in 2025 (adjusted annually for inflation).² These distributions are excluded from the donor’s gross income (they don’t generate a charitable income tax deduction, either). That exclusion from gross income should make QCDs relatively more attractive to high-income itemizers when the two new limitations on charitable deductions become effective.

Although the new limitations may shift some donors’ charitable giving strategies, one thing hasn’t changed: the tax efficiency of donating appreciated stock held long term, rather than cash, to charity. With those gifts, not only would a taxpayer receive an income tax charitable deduction based on the fair market value of the donated asset and painlessly diversify out of what may be a concentrated position, but he or she also would not have to pay capital gains tax on that asset’s unrealized appreciation.

Evaluate your potential state and local tax (SALT) deduction

The OBBBA increases, from 2025 through 2029, the state and local tax (SALT) deduction cap to $40,000, with a phase-down for taxpayers that make more than $500,000 (half these amounts for married couples filing separately), ultimately subjecting taxpayers making more than $600,000 to the current $10,000 cap. Taxpayers in the top (37%) income tax bracket would also see the value of their SALT deductions (and other deductions) reduced by the overall limitation, discussed earlier, on the tax benefit of itemized deductions.

Married couples who have been filing jointly may consider whether filing separately for U.S. income tax purposes would allow one or both spouses to take advantage of the increased SALT deduction cap. This could be the case if at least one spouse’s income is low enough. The SALT deductibility phase-down for married couples filing separately begins at $250,000.

Business owners may also continue to use the so-called “SALT cap workaround” for certain pass-through entities—including partnerships, S corporations and certain LLCs—which allows its owners to deduct, indirectly, SALT paid by the pass-through entity beyond the current $10,000 SALT deduction cap.

Assess other business-related opportunities

The OBBBA contains several other business-friendly provisions, including the permanent restoration of 100% bonus depreciation and immediate domestic research and development (R&D) expensing (with potential retroactive applicability for small businesses). Business owners may consider the timing of equipment purchases and domestic R&D activities to take advantage of these enhanced benefits.

The new law also permanently extends the 20% Qualified Business Income (QBI) deduction for certain owners of certain pass-through entities.³ Business owners may benefit from reviewing their entity structures to optimize deductibility.

Companies that may qualify for the Qualified Small Business Stock (QSBS) exclusion should consider the new thresholds that apply to QSBS issued after the OBBBA’s enactment. For a company to be considered a qualified small business at the time it issues C corporation stock, it now may have up to $75 million, rather than $50 million, in gross assets. In addition, for original issue stock issued after July 4, 2025, up to $15 million may be excluded from capital gains tax, compared to the prior $10 million limit.

Review estate plans

The new law permanently increases the exclusion amount used for estate, gift and GST tax purposes from $13.99 million to a new base amount of $15 million, effective January 1, 2026, and adjusted for inflation thereafter. This permanent increase should be a relief for many who have considered revising estate plans in anticipation of the expiration of the current lifetime exclusion amounts at the end of 2025.

However, we still recommend giving wealth to future generations as long as you have the capacity and desire to do so. Gifting wealth to future generations can offer strategic benefits, as future appreciation on those assets should not be subject to estate tax. We encourage all our clients with the capacity and desire to make a gift to allow their J.P. Morgan team to prepare a Wealth Plan. Your team can provide projections to ensure your financial well-being.

Given the permanence of the exclusion amounts, taxpayers who have made gifts into irrevocable trusts and have done other planning in anticipation of the reductions in the exclusion amounts that had been scheduled to become effective January 1, 2026, may want to revisit those gifts and other planning to see whether any of that planning should be reverse-engineered, as it were, to account for changed circumstances.

We can help

We at J.P. Morgan Private Bank, along with our government relations colleagues, tax policy experts, consultants and many others, are reviewing the new law closely. Talk to your J.P. Morgan team to learn more.