Understanding the Personal Tax Implications of the New Tax Law in 2025

August 25, 2025

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On July 4, the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA extends key provisions of the Tax Cuts and Jobs Act (TCJA) set to expire at the end of 2025 while introducing several new tax measures.

Leaders across the Goldman Sachs Family Office and Tax Policy & Research groups have created an overview of the major provisions included and the potential impact on wealth planning. Of note, the overview highlights upcoming changes to the following:

Standard deduction
State and local tax deduction
529 accounts
Child tax credit
Health Savings Accounts

Reminder: Taxes can be complicated, and everyone’s situation is different. It’s a good idea to consult a tax professional if you have specific questions or concerns. The general overview provided in this article is intended to help inform your planning conversations with your financial, tax, and/or wealth advisors.

As federal tax guidance and rules are always subject to change, the IRS is your best source for the most up-to-date information.

Key takeaways

1. Many personal tax provisions are extended

Many personal tax provisions from the TCJA that were scheduled to sunset in 2025 have been permanently extended—including the increased estate, gift, and generation-skipping transfer (GST) tax exemption levels, lower income tax rates, and higher alternative minimum tax (AMT) phaseouts.

2. New provisions impact the tax benefits of charitable giving

New provisions limiting itemized deductions, particularly the charitable contribution deduction, will impact the tax benefits of donations.

3. The income tax benefits of qualified small business stock (QSBS) were significantly expanded

These expanded provisions could provide opportunities for family-owned businesses.

Several major TCJA provisions have been extended

Against a backdrop of uncertainty around a number of TCJA provisions scheduled to sunset at the end of 2025, the OBBBA permanently extends and/or enhances many of these provisions.

Estate, gift, and GST tax exemptions are increased to $15 million (from $13.99 million) per taxpayer for gifts made or deaths occurring in 2026 and will be adjusted for inflation beginning in 2027.
Income tax rates for individuals, estates, and trusts will remain at TCJA levels in perpetuity.
The individual AMT exemption levels and exemption phase-out thresholds enacted under the TCJA are permanently extended.

Additional rules on charitable giving deductions

Beginning in 2026, new limitations on charitable deductions will directly impact potential tax benefits.

A new 0.50% adjusted gross income (AGI) floor will apply to charitable contributions for individual taxpayers who itemize deductions. For example, if an individual’s AGI is $10 million, they may only deduct donations of $50,000 or more.
The maximum value of each dollar of an itemized deduction is capped at $0.35 for taxpayers in the highest tax bracket (previously $0.37).

Expanded QSBS provisions could provide opportunities for family-owned businesses

The OBBBA enhanced the tax benefits of QSBS for stock acquired after July 4, 2025. Notable enhancements include:

New time-based gains exclusions. Taxpayers will be eligible to exclude 50% of gain after holding the stock for three years, 75% of gain after four years, and 100% of gain after five years. (Previously taxpayers were required to hold the stock for five years to qualify for the gain exclusion.)
Increased caps on gain exclusions. The per-issue limit on the amount of eligible gain is increased to $15 million (from $10 million) and will be adjusted for inflation.
Increased the gross asset limit on corporations. A corporation with gross assets under $75 million (to be adjusted for inflation) can qualify as a qualified small business provided certain other requirements are satisfied. (Previously only corporations with gross assets under $50 million qualified.)

Read the full report.

_{Prepared by Tax Policy & Research of Goldman Sachs Wealth Services, L.P and the GS Family Office of Goldman Sachs & Co. LLC as applicable.}

This article is for informational purposes only and is not a substitute for individualized professional tax advice. Individuals should consult their own tax advisor for matters specific to their own taxes. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Goldman Sachs Bank USA and Goldman Sachs & Co. LLC are not providing any financial, economic, legal, accounting, tax or other recommendations in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates. Neither Goldman Sachs Bank USA, Goldman Sachs & Co. LLC nor any of their affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements of any information contained in this document and any liability therefore is expressly disclaimed. You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format without the express written consent of Goldman Sachs. This foregoing restriction includes, without limitation, using, extracting, downloading or retrieving this information, in whole or in part, to train or finetune a machine learning or artificial intelligence system.