Executives: How the Big Beautiful Bill Act Affects Your Compensation and Financial Planning

Bigger Tax Savings for Executives

One of the most immediate benefits is the expansion of the State and Local Tax (SALT) deduction. The cap has jumped from $10,000 to $40,000 for households earning under $500,000. In high-tax states like Connecticut, New York, and California, that can translate into $7,500 to $12,000 in annual savings. For many executives, this reduces effective tax rates by two to three percentage points—a meaningful bump in take-home pay.

OBBBA also makes permanent several provisions from the 2017 Tax Cuts and Jobs Act, including lower marginal tax rates for high earners and the 20% deduction for qualified business income. Together, these changes provide a predictable tax environment that executives can plan around for the long haul.

Equity and Deferred Compensation Opportunities

That stability is especially important when it comes to stock options, restricted stock units, and deferred compensation. With tax rates now locked in, executives can confidently design long-term strategies for exercising options, diversifying concentrated stock positions, or scheduling distributions from nonqualified deferred compensation plans. Extra cash flow from the SALT deduction makes it easier to fund these strategies without straining liquidity.

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More Room for Benefits and Perks

While OBBBA doesn’t directly change the rules for Health Savings Accounts, the additional cash flow it generates makes maxing them out far more achievable. HSAs continue to be one of the most powerful tools available, combining upfront deductions with tax-free growth and withdrawals for medical expenses.

The rising cost of healthcare also makes executive wellness benefits—such as physicals and comprehensive programs—more valuable. And with more cash available to contribute, flexible spending accounts can play a bigger role too, with less worry about the “use it or lose it” rules.

Estate and Succession Planning

For wealth transfer, OBBBA’s combination of stable tax rates and higher after-tax cash flow opens new doors. Executives can pursue more consistent annual gifting programs, leverage grantor trust structures with greater confidence, and strengthen charitable giving strategies.

Those with business ownership or side ventures should also pay attention to how the Act affects succession planning. Buy-sell agreement funding, insurance strategies, and business valuations may all shift in light of the new environment.

Putting Extra Cash to Work

For many executives, the expanded SALT deduction alone frees up thousands of dollars a year. That money can be put to work in a number of ways; maxing out retirement contributions, building stronger emergency reserves, upgrading insurance coverage, or accelerating debt repayment. The key is to deploy it strategically, rather than letting it disappear into everyday spending.

Geography also plays a role. By making high-tax states more financially competitive, OBBBA may influence career mobility, retention decisions, and even real estate planning.

Next Steps

For immediate impact, executives should consider adjusting payroll withholding to capture SALT benefits throughout the year, rather than waiting for a refund. Reviewing compensation packages for restructuring opportunities is also smart. Looking further ahead, the certainty OBBBA provides makes it possible to build more robust multi-year financial plans—whether that’s for retirement, education funding, business expansion, or charitable goals.

The One Big Beautiful Bill Act gives executives a unique opportunity: more cash flow, lower effective tax rates, and greater certainty for the future. By weaving these changes into your tax, compensation, and long-term financial strategy, you can position yourself for some of the strongest wealth-building years of your career.

At WHZ Strategic Wealth Advisors, we’re experienced in executive financial planning that optimizes complex compensation packages and navigates evolving tax legislation. Our "Plan Well. Invest Well. Live Well.™" process helps to ensure you capture every available opportunity while maintaining focus on your long-term financial objectives. Contact us for a complimentary consultation now or call (860) 928-2341 to learn how we can help you turn these legislative changes into strategic advantages for your financial future.

Authored by WHZ Associate Vice President, Wealth Advisor Jonathan Mathews. AI may have been used in the research and initial drafting of this piece. Investments are subject to risk, including the loss of principal. Past performance is no guarantee of future results. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084, 860.928.2341. http://www.whzwealth.com. These materials are general in nature and do not address your specific situation. For your specific investment needs, please discuss your individual circumstances with your financial advisor. WHZ Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice.