The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. It brings sweeping changes to federal income tax rules that directly impact Florida taxpayers. From permanent extensions of popular deductions to entirely new savings vehicles, these modifications require immediate attention from individuals, families, and business owners across the Sunshine State.
Florida residents benefit from the state's lack of personal income tax, but federal tax changes still significantly affect their overall tax liability and financial planning strategies. Our Stuart estate planning lawyer explains these new provisions to help you make informed decisions about deductions, business structures, and long-term wealth preservation.
What Is the Qualified Business Income (QBI) Deduction?
The OBBBA makes permanent the Section 199A Qualified Business Income deduction from 2017, providing long-term certainty for Florida's many entrepreneurs and business owners. This deduction allows eligible taxpayers to deduct up to 20% of their qualified business income from partnerships, S corporations, and sole proprietorships.
How to Qualify for the QBI Deduction
The new law expands income thresholds where QBI limitations phase in. For single filers, the phase-in window increased from $50,000 to $75,000 over the income threshold, while married couples filing jointly see their window expand from $100,000 to $150,000.
Consider a fictional marketing consultant in Tampa who operates as a sole proprietor with $120,000 in QBI and $200,000 in total taxable income. Under the expanded thresholds, she may qualify for a larger portion of the 20% deduction, potentially saving thousands in federal taxes.
How Do Trump Accounts Work?
The OBBBA introduces "Trump Accounts." These specialized savings vehicles for children under 18 will become available starting in January 2026.
What Are the Tax Benefits of Trump Accounts?
Parents and other individuals can contribute up to $5,000 annually with after-tax dollars. Employers of the parents can also contribute up to $2,500 per year per Trump Account. The key tax advantage is that Trump Account earnings grow tax-deferred until they are withdrawn.
Government Contributions and Investment Requirements
The federal government automatically contributes $1,000 for children born between January 1, 2025, and December 31, 2028. Before age 18, contributions must be invested in low-cost funds tracking the S&P 500 or similar U.S. company indexes. After age 18, investment options expand while withdrawals are set to follow traditional IRA rules.
Picture the hypothetical Johnson family in Orlando with newborn twins born in 2025. Each child receives the $1,000 government contribution, and the parents contribute $3,000 annually per account. By age 18, assuming 7% average annual returns, each child’s Trump Account could grow to over $100,000.
What Is the Increased Standard Income Tax Deduction Under the OBBBA?
The OBBBA permanently increases standard deduction amounts to $15,750 for single filers, $23,625 for head of household, and $31,500 for married couples filing jointly. These amounts will be indexed for inflation in future years.
Senior Bonus Deduction
Taxpayers aged 65 and older can claim an additional $6,000 deduction ($12,000 for qualifying married couples) from 2025 through 2028. This benefit phases out beginning at $75,000 modified adjusted gross income for single filers and $150,000 for joint filers.
Imagine fictional retirees Bob and Linda in Sarasota with $140,000 in retirement income. They could claim the full $12,000 senior bonus deduction, significantly reducing their federal tax liability.
State and Local Tax (SALT) Deduction Improvements
While Florida residents don't pay state income tax, they benefit from SALT deduction changes affecting property tax deductibility. The OBBBA temporarily raises the SALT cap from $10,000 to $40,000 for taxpayers earning under $500,000 between 2025 and 2029.
For example, say homeowners David and Maria in Coral Gables pay $25,000 annually in property taxes. The new $40,000 cap allows them to deduct their full property tax burden, assuming their income remains below $500,000.
Additional Changes in OBBBA and Strategic Considerations
The One Big Beautiful Bill Act also introduces at least two other significant changes to income taxes.
Tips and Overtime Pay
The OBBBA introduces temporary deductions for tip income and overtime pay from 2026 through 2028. Workers can deduct up to $25,000 in tip income and up to $12,500 in overtime pay (single filers) or $25,000 (joint filers), phasing out at higher income levels. Florida's substantial tourism and hospitality sector employs many tipped workers who could benefit significantly.
Child Tax Credit
The Child Tax Credit increases to $2,200 per qualifying child and becomes permanently indexed for inflation. However, the OBBBA terminates most clean energy credits, including residential solar and electric vehicle credits, by September 2026.
Get the Skilled Tax Planning Help You Need
These income tax changes create new opportunities requiring careful planning. Pass-through entity owners should reassess business structures considering the permanent QBI deduction, while families should evaluate how Trump Accounts fit into broader financial planning goals.
Working with experienced Florida tax and estate planning professionals becomes increasingly important as these new rules take effect. At Beacon Legacy Law™, our team stays current with federal tax changes and their intersection with Florida law to help clients maximize benefits while maintaining compliance.