President Donald Trump’s signature legislation, the “One Big Beautiful Bill,” is chock full of measures that will lock in and expand tax benefits for high-income Americans.
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“This bill provides several beneficial tax advantages for high-net-worth individuals,” said Spencer Carroll, CPA and account executive at Gelt.
Here’s a breakdown of the three most impactful provisions for affluent taxpayers — and what they can do now to prepare.
Top Tax Rate Locked at 37% for High Earners
One of the bill’s cornerstone provisions is the permanent extension of the top marginal tax rate established by the 2017 Tax Cuts and Job Act (TCJA).
“This would keep the high-net-worth individuals in the top marginal income bracket at a tax rate of 37%, instead of reverting to the pre-TCJA level of 39.6%,” Carroll said.
For wealthy Americans, this means thousands in annual tax savings, especially for those with significant income from investments, business ownership or real estate.
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Full Bonus Depreciation Returns for Business Owners
Another major win for high-income earners — particularly entrepreneurs and real estate investors — is the return of 100% bonus depreciation.
“The return of 100% bonus depreciation will allow high-net-worth business owners and real estate investors to take large, accelerated depreciation losses,” Carroll said. “This will lead to a potential significant reduction in their taxable income.”
Previously, only 40% of an asset’s purchase price could be deducted upfront. Now, eligible purchases –like equipment, vehicles or property improvements — can be fully written off in the first year.
SALT Deduction Cap Quadruples to $40,000
The bill also enacts a dramatic increase in the state and local tax (SALT) deduction cap, raising it from $10,000 to $40,000.
“This will allow for a $30,000 [additional] deduction of state and local taxes, which primarily consists of state income tax and property tax for the average taxpayer,” Carroll said. “This will equate to $11,000 of federal tax savings for high-net-worth individuals (HNWIs) at the top marginal tax rate.”
This change is especially beneficial for residents of high-tax states like California, New York and New Jersey, where state and property taxes often exceed the previous cap.
What Wealthy Americans Can Do To Prepare For These Changes
With these changes on the horizon, high-income earners should begin planning immediately.
“High-net-worth individuals should talk now with their CPA about what their financial expectations are for this year and their projected tax bill,” Carroll said. “Based on this discussion, HNWIs may want to take and look into strategic steps like buying real estate to reduce their tax bill.”
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This article originally appeared on GOBankingRates.com: 3 Ways Trump’s ‘One Big Beautiful Bill’ Could Save the Wealthy Thousands
