The One Big Beautiful Bill (OBBB) brings a sweeping overhaul to the tax landscape, profoundly impacting individuals, businesses, and the financial advisory sector. For securities professionals, understanding these changes is critical to advising clients effectively and navigating the updated regulations.
The OBBB could reshape how you raise capital, work with issuers, and navigate disclosure requirements. This article outlines the key provisions of the OBBB, focusing on areas that directly affect financial planning and investment strategies.
From updated tax brackets to new deductions and credits, here is everything securities professionals need to know.
Key Provisions with Relevance for Securities Professionals
The OBBB is a comprehensive package of more than 15 previously introduced bills. It’s designed to streamline access to capital markets for small and midsize businesses and reduce regulatory burdens on capital raising, especially in the private market.
Here are the core components that could impact your work in the securities industry:
Permanent Extension of TCJA Individual Tax Reductions & Standard Deduction
- The lower individual tax brackets and increased standard deduction from the 2017 Tax Cuts and Jobs Act are now made permanent, offering tax predictability. This is vital for planning client strategies (e.g., tax-loss harvesting, income distribution timing). Ways and Means
- Standard deduction is slightly enhanced through 2028 ($1,000 extra for single filers; $2,000 for married filing jointly in 2026 example). Ways and Means
SALT Deduction Cap Raised Temporarily
- The state and local tax (SALT) deduction cap jumps from $10,000 to $40,000 for taxpayers with MAGI below $500,000, thereafter growing 1% annually (with a sunset back to $10,000 in 2030). Thomson Reuters Tax
- For clients in high-tax states or those with concentrated municipal bond positions, this offers potential tax relief, though they must plan before the phase-out timeline.
New Individual Deductions
- Tip Income Deduction: Up to $25,000 in tips can now be deducted.
- Age 65+ Social Security Deduction: Individuals 65+ get an extra $6,000 deduction.
- Auto Loan Interest Deduction: Up to $10,000 per year on new personal-use vehicle loans (2025–2028). Thomson Reuters Tax
- These can influence tax-efficient portfolio withdrawals or planning for high-net-worth clients relying on Social Security or operating small businesses.
Estate, Gift, and Generation-Skipping Tax Exemption Increases
- From 2026 onward, the estate tax exemption rises to $15 million per individual and $30 million for couples, adjusted for inflation. Kiplinger
- Estate planning for ultra-high-net-worth clients should be revisited. Trust structures, gifting strategies, and inheritance models may need updating to align with new thresholds.
New Temporary Tax-Advantaged Deductions
- Temporary SALT increase, tip/overtime deductions, and auto loan interest deduction expire end of 2028. Kiplinger Thomson Reuters Tax
- Securities professionals should help clients take immediate advantage before these sunset.
Qualified Business Income (QBI) Deduction Adjustments
- OBBBA extends and refines the Section 199A QBI deduction, which allows eligible taxpayers to deduct up to 20% of qualified business income from pass-through entities.
- The bill makes the deduction permanent (it was previously set to expire in 2025), providing stability for owners of S‑corps, partnerships, and sole proprietorships.
- Certain income thresholds have been increased and indexed for inflation, reducing the risk of phase-outs for higher‑earning professionals.
- For securities professionals advising small business clients (or those operating their own advisory practice) this change is particularly important. It enables tax-efficient income structuring, encourages entrepreneurial activity, and creates more predictable long-term planning opportunities.
Expanded 529 Plan Capabilities & Education Savings Innovations
While a separate focus (see below), this has implications for retirement vs. education portfolio allocations.
Student Loans and Workforce Grants
- OBBBA caps certain graduate and professional student loans (e.g., $50,000/year for law/medical, $200,000 lifetime). It also expands Pell Grants to workforce-training programs.
- Professionals advising clients on education funding models should be aware of these structural shifts.
Other Macro Tax Effects Potentially Relevant for Market Analysis
Tax on college endowment investment income, certain clean energy credit phase-outs, and overall impact on fiscal policy may have broader economic implications affecting capital markets, especially in education, renewable energy, and municipal bonds. Baker Tilly SSGA
Expanding the Scope of 529 Plans
OBBBA significantly broadens the qualified uses of 529 education savings plans, making them more flexible for modern career pathways.
Expanded Qualifications for 529 Plan Withdrawals
Credentialing, Licensing, and CE
- 529 funds may now cover costs related to credentialing programs, including tuition, exam fees, book costs, equipment, and continuing education necessary to obtain or maintain professional credentials. Saving for College The Week NGWA Invest529
- Applicable Programs: Those recognized under federal/state Workforce Innovation and Opportunity Act (WIOA), the VA’s WEAMS database, registered apprenticeship programs, or recognized credentialing authorities. Saving for College The Week Invest529
Expanded K-12 and Homeschooling Expenses
- Starting tax year 2026, withdrawal limits double, from $10,000 to $20,000 annually for K-12 expenses. The Week Kiplinger
- Qualified expenses now include books, standardized test fees (SAT/ACT), online tools, tutoring, dual enrollment costs, curriculum materials, and homeschooling resources (not just tuition). The Week Kiplinger Peterson & Associates, P.S. Ascensus
529 Plans and Workforce Development
- The program now supports job training, credentialing, and certification expenses, aligning with workforce development initiatives. NGWA Kiplinger Ascensus
529 Plan Implications for Securities Professionals
- Portfolio Advice: Clients may redirect excess 529 balances toward continuing education or license maintenance, allowing flexible reallocation of investment assets.
- Tax Efficiency: Using 529 assets tax-free for credentialing can reduce clients’ taxable income. This is something planners can structure within broader tax-advantaged strategies.
- State-by-State Variation: While these are federal changes, some states may impose penalties or have implementation differences. The Wall Street Journal
Alternative Minimum Tax (AMT) Adjustments
The AMT exemption amounts have risen, reducing its applicability to many clients:
- Single taxpayers’ exemption increased to $100,000 (from $80,000).
- Married couples filing jointly now enjoy an exemption of $200,000 (previously $160,000).
Advisory Tip: Clients with substantial passive income should have their portfolios reviewed for compliance and optimization without triggering additional unexpected liabilities.
Key Takeaways for Securities Professionals
The OBBB reshapes the American tax code, offering opportunities to reduce client burdens while incentivizing economic activity. To stay ahead in the rapidly shifting landscape, securities professionals should:
- Proactively review client portfolios to exploit new tax-saving opportunities.
- Educate clients on key changes, emphasizing long-term benefits and potential adjustments.
- Partner with estate planning and tax professionals to deliver comprehensive financial solutions.
- Monitor regulatory updates from the SEC and FINRA.
- Review internal policies for capital formation, accredited investor verification, and private securities due diligence.
| Area | Key Actions |
| Tax Planning | Incorporate permanent TCJA relief, utilize temporary deductions (tip, SALT, auto interest), and recalibrate projections with extended standard deductions. |
| Estate and Wealth Structuring | Revisit estate plans in light of higher exemptions; update structures to optimize transfer and minimize tax exposure. |
| Portfolio Strategy | Monitor implications of SALT changes, endowment tax, and clean energy credit shifts on relevant sectors. |
| Education and Credentialing Funding | Advise clients on 529 flexibility—career changers can invest in credentials tax-free; families can cover broader K–12 and homeschooling costs. |
| Cross-Product Coordination | Coordinate 529 withdrawals with IRAs, 401(k)s, and Roth conversions as part of comprehensive tax-efficient funding strategies. |
| Stay Flexible | With several provisions expiring by 2028 (e.g., temporary SALT, auto interest, tip deduction), proactive and agile planning is essential. Kiplinger |
With accurate advice and forward-thinking strategies, securities professionals can position themselves as indispensable resources for navigating this new era. Take action today to ensure your clients’ financial success in light of the OBBB.
Staying Ahead
The OBBB represents a push to rebalance capital markets, aiming to empower small issuers, unlock private investment, and modernize outdated rules. For securities professionals, it could mean more flexibility, more responsibility, and more opportunity.
Whether you’re advising startups, structuring private offerings, or managing client portfolios, understanding the OBBB will help you stay competitive and compliant in a changing financial landscape. Stay tuned to regulatory developments and professional updates to remain informed on how the OBBB may reshape your role in capital formation.
At STC, we understand the challenges you can face when navigating industry shifts like the OBBB. That’s why over 1.5 million financial professionals have trusted us with their securities education needs.
FAQs Securities Professionals Need to Know About the One Big Beautiful Bill
Q: What is the One Big Beautiful Bill (OBBB)?
A: The One Big Beautiful Bill (OBBB) is a comprehensive legislative package consolidating over 15 previously introduced bills. It aims to modernize and simplify tax laws while empowering small and midsize businesses by streamlining access to capital markets and reducing regulatory burdens.
Q: What steps should securities professionals take to adapt to the OBBB?
A: To effectively leverage the changes introduced by the OBBB, securities professionals should:
- Proactively review client portfolios to identify new tax-saving opportunities.
- Educate clients about changes to tax brackets, credits, and compliance requirements.
- Update internal compliance policies to align with updated capital formation and disclosure regulations.
- Partner with tax and estate planning professionals to provide holistic financial solutions.
- Stay informed on regulatory updates and adjust strategies as needed.
Q: Why is understanding the OBBB crucial for securities professionals?
A: The OBBB represents a monumental shift in the financial landscape, offering new ways to raise capital, access private markets, and reduce regulatory burdens. By staying educated on its provisions, securities professionals can better serve their clients, optimize financial strategies, and maintain a competitive edge in a dynamic market.
