Tax laws can feel overwhelming, especially when new legislation makes headlines. You may be wondering what’s changing, and more importantly, what it means for you and your financial future. With the One Big Beautiful Bill Act (OBBA) signed into law in July 2025, we’re already evaluating what its implications mean for you.
At TCI, we believe tax planning is more than minimizing liability. It’s about helping you keep more of what you’ve worked so hard for and aligning every decision with your long-term goals. Here are a few highlights related to the OBBA worth your attention, as well as reminders of timeless strategies to keep you well positioned.
Key Updates to Know
1. Standard vs. Itemized Deductions: Worth a Fresh Look
If you’ve been automatically taking the standard deduction for the past several years without running the numbers, this is worth revisiting.
The standard deduction has increased for 2026 but so has one of the itemized deductions. The SALT (State and Local Taxes) deduction allows for a federal tax deduction for state income or sales taxes and property taxes. Depending on your income, the $10,000 deduction cap that’s been in place since 2017 has been raised to as much as $40,000, with the deduction decreasing above higher income levels. For some, especially those in higher-tax states or with significant property taxes, itemizing may once again make sense.
2. Charitable Giving Now Benefits More People
Previously, you had to itemize to get any tax benefit from charitable giving, but that is no longer true under the new bill. Even if you take the standard deduction, you can now deduct $1,000 (single) or $2,000 (married filing jointly) for cash gifts made directly to qualifying charities (not donations via a donor advised fund or property donations). This is a meaningful opportunity to give and receive tax benefits.
3. New Deduction for Those 65+
If you or your spouse is 65 or older, there’s a new additional deduction of $6,000 for individuals and $12,000 for married couples filing jointly, on top of whichever deduction you take (standard or itemized). This deduction starts to decrease starting at income levels of $75,000/$150,000. This doesn’t eliminate tax on Social Security, but it can help reduce overall taxable income.
Tried and True Strategies That Still Matter
1. The HSA Triple Tax Benefit
The Health Savings Account, or HSA, is one of the most tax-efficient tools available. It’s the only account in the tax code that offers a triple tax benefit: contributions go in pre-tax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free.
To contribute to an HSA, you must be enrolled in a qualifying High-Deductible Health Plan (HDHP) which may or may not be right for you. If you have ongoing health needs or frequent prescriptions, the higher out-of-pocket costs that come with an HDHP may outweigh the tax savings. However, if you are in a high-deductible health plan and not using an HSA, it may be worth revisiting. Even if you switch from a HDHP to a non-HDHP at any point, your HSA funds remain yours to use with no deadline and can even support healthcare costs in retirement, including Medicare premiums.
2. 529 Plans: Flexible, Tax-Free Education Savings
529 plans remain a flexible tool that offers tax-free growth and withdrawals for qualified education expenses (not just traditional college) and allows you to change beneficiaries to another eligible family member if needed. Many states also offer a state income tax deduction for contributions.
3. QCDs: Giving with Purpose and Efficiency If You’re 70.5 or Older
A Qualified Charitable Distribution (QCD) allows you to give directly from your IRA to a charity, keeping that amount out of your taxable income. This can also help you keep income within key thresholds. Notably, QCDs count toward your Required Minimum Distribution (RMD) for the year. The 2026 annual limit is $111,000 per person, and you must be at least 70½ at the time of the distribution. Beneficiaries who have inherited an IRA and are at least 70½ are also eligible.
How TCI Can Support You
This is not an exhaustive overview of all the provisions of the new bill or other important tried and true tax strategies, and individual situations vary. Please consult your tax professional or reach out to our team for personalized guidance.
We are continuously looking ahead and considering meaningful strategies to help you evaluate how these strategies fit into your broader priorities and plans.
If you have questions, we are here to help.
Important Disclosure
TCI Wealth Advisors, Inc. is an SEC registered investment advisor. This material is provided for informational purposes only and should not be construed as investment advice or a recommendation. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. TCI is neither a law firm nor a certified public accounting firm, and this material should not be construed as legal or accounting advice. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from TCI.
