New Tax Rules, New Opportunities: The OBBBA Moves Every High Earner Under 55 Should Make

The One Big Beautiful Bill Act, often referred to as OBBBA, adds another layer to that picture. Some provisions create immediate tax planning opportunities. Others, especially newly established Trump Accounts for children, require continued monitoring as guidance develops. 

Because this article is being published just before Independence Day, it is also a good moment to think about what financial freedom really means. It is not just about minimizing taxes in one year. It is about creating the flexibility to make confident decisions for your family, your future, and the life you want to build. 

Here’s what high earners under 55 should be reviewing now. 

Use the Higher SALT Cap Strategically 

For taxpayers who itemize deductions, the state and local tax deduction, or SALT deduction, has become more valuable. For 2025, the SALT deduction cap increased to $40,000, or $20,000 for married taxpayers filing separately. For 2026, the cap is indexed upward to $40,400. That matters in higher-tax states like Connecticut, Massachusetts, New York, and New Jersey, where property taxes and state income taxes can quickly exceed the prior $10,000 cap. 

The benefit is not unlimited. The cap begins to phase down when modified adjusted gross income exceeds $500,000, or $250,000 for married taxpayers filing separately, and it cannot be reduced below $10,000, or $5,000 for married filing separately. For high earners near that threshold, income timing may matter more than it used to. 

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If your income fluctuates because of bonuses, equity vesting, business income, Roth conversions, or deferred compensation, it may be worth reviewing whether income can be spread across years. The goal is not simply to maximize one deduction. It is to understand how the SALT cap interacts with your marginal bracket, charitable giving, alternative minimum tax exposure, and overall cash flow. 

Rethink Charitable Giving Before the New Floor Changes the Math 

OBBBA also changes the charitable deduction landscape. Beginning in 2026, itemizers generally must clear a new charitable contribution floor equal to 0.5% of adjusted gross income before charitable gifts become deductible. For a household with $400,000 of AGI, that means the first $2,000 of charitable giving would not produce an itemized charitable deduction. 

That does not make charitable giving less meaningful. It does mean high earners should be more intentional about timing and structure. Bunching multiple years of gifts into one tax year, using donor-advised funds, donating appreciated securities, or coordinating giving with a high-income year may help align philanthropic intent with tax efficiency. 

For families that already give consistently, this is a good time to move from reactive giving to a formal charitable strategy. Giving is often one of the clearest expressions of a family’s values. A strong plan helps you give with purpose while still protecting your own long-term security. 

Monitor Trump Accounts, But Do Not Rush 

Trump Accounts are one of the most frequent questions families are asking right now. Can I open a Roth IRA for a newborn? Is this a Trump IRA? Should grandparents fund one right away? 

The short answer is that Trump Accounts are not Roth IRAs. The IRS describes them as a new type of individual retirement account for eligible children. A parent, guardian, or other authorized person may establish an account for a child who has not turned 18 before the end of the calendar year in which the election is made and who has a valid Social Security number. Eligible U.S. citizen children born between January 1, 2025, and December 31, 2028, may qualify for a one-time $1,000 government contribution. 

As of June 2026, the IRS has made Form 4547 available for Trump Account elections, and taxpayers can now view and submit certain elections through their IRS Individual Account. That is an important development, but WHZ is still monitoring the rollout. Families should continue watching for custodial availability, investment options, account administration details, and tax coordination guidance before treating the account as a core planning vehicle. 

Trump Accounts may become useful supplemental accounts for children, but they should not replace established tools such as 529 plans, custodial accounts, taxable investment accounts, or Roth IRAs when a child has earned income. 

Use Expanded 529 Rules Thoughtfully 

The 529 plan also gained flexibility under OBBBA. Effective January 1, 2026, the annual K–12 withdrawal cap increased from $10,000 to $20,000. The law also broadened certain qualified education expenses, including curriculum materials, standardized testing fees, instructional resources, online programs, tutoring, and certain credentialing costs. 

For high-earning parents and grandparents, this may change how education savings are allocated. A 529 plan can now play a larger role before college, especially for families paying private school tuition or supplementing a child’s education with specialized programs. 

Still, using 529 assets earlier may reduce what is available for college later. The right approach depends on the child’s age, expected education path, state tax treatment, family cash flow, and whether grandparents or other relatives are contributing. Families should also confirm whether their state tax rules conform to the expanded federal treatment before making withdrawals for new categories of expenses. 

Make Multi-Year Planning the Priority 

One of the most important changes under OBBBA is that lower individual tax brackets are no longer viewed as a temporary window that would automatically sunset after 2025. That stability gives high earners more room to plan over several years. 

For professionals with volatile income, that can be significant. A high-income household may want to evaluate whether to accelerate or defer income, exercise stock options in phases, manage RSU concentration, spread Roth conversions over multiple years, harvest capital losses, or coordinate charitable giving with income spikes. 

This is not about predicting future tax law. It is about building flexibility into your plan. When tax brackets are more predictable, you can make better decisions about when to recognize income, when to deduct expenses, when to give, and when to shift assets for long-term family goals. 

Put the Pieces Together 

For high earners under 55, the best OBBBA move is not a single move. It is a coordinated review. 

The SALT deduction may improve cash flow, but the phase-out can complicate planning. The charitable floor may change how and when you give. Trump Accounts may become useful for children, but they are still new. Expanded 529 rules create more education planning flexibility. Permanent lower brackets provide a stronger foundation for multi-year strategy. 

That is what financial freedom is really about. Not one deduction. Not one account. Not one market year. It is the ability to make decisions from a place of confidence because the major parts of your financial life are working together. 

At WHZ Strategic Wealth Advisors, our Plan Well. Invest Well. Live Well. process is built to help clients evaluate opportunities like these in context. The goal is not just to lower taxes in one year. It is to create a coordinated, tax-aware strategy for building wealth, supporting your family, and making confident decisions over time. Schedule a complimentary discovery session or call us at (860) 928-2341 to start building a plan that supports your future. Together, we can help you move forward with Absolute Confidence. Unwavering Partnership. For Life. 

Authored by Leisl L. Langevin, CFP® CDFA®. AI may have been used in the research and initial drafting of this piece. The fees, expenses, and features of 529 plans can vary from state to state. 529 plans involve investment risk, including the possible loss of funds. There is no guarantee that an education-funding goal will be met. In order to be federally tax free, earnings must be used to pay for qualified education expenses. The earnings portion of a nonqualified withdrawal will be subject to ordinary income tax at the recipient’s marginal rate and subject to a 10 percent penalty. By investing in a plan outside your state of residence, you may lose any state tax benefits. 529 plans are subject to enrollment, maintenance, and administration/management fees and expenses. WHZ Strategic Wealth Advisors does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. 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. 

RELATED FAQ's

What is the One Big Beautiful Bill Act, or OBBBA? 

OBBBA is federal tax legislation signed into law on July 4, 2025. It affects federal taxes, deductions, credits, savings vehicles, and planning strategies for individuals, families, and businesses. 

What is the new SALT deduction cap under OBBBA? 

For 2025, the SALT deduction cap increased to $40,000, or $20,000 for married taxpayers filing separately. The cap begins to phase down when modified adjusted gross income exceeds $500,000, or $250,000 for married filing separately. 

How does the new charitable contribution floor affect high earners? 

Beginning in 2026, itemizers generally must exceed a charitable contribution floor equal to 0.5% of AGI before charitable gifts become deductible. This may make bunching, donor-advised funds, and appreciated asset gifts more important planning tools. 

Can parents open a Roth IRA for a newborn under the Trump Account rules? 

A Trump Account is not a Roth IRA. It is a new IRA-style account for eligible children. After the child reaches the year they turn 18, the account is generally treated like a traditional IRA. A future Roth conversion may be possible, but that should be reviewed when the time comes. 

Should families take action on Trump Accounts right now? 

WHZ is monitoring Trump Account guidance closely. Families may need to understand eligibility and the IRS election process, but private funding decisions should be reviewed carefully as implementation details continue to develop. 

How did OBBBA change 529 plans? 

Beginning in 2026, the annual K-12 withdrawal cap increases from $10,000 to $20,000. OBBBA also broadened certain qualified education expenses, which may make 529 plans more flexible for families planning for education costs before college.