OBBBA Tax Planning in 2025 & 2026: Smart Moves for Houston Bay Area Families
If you live in Friendswood, Pearland, Clear Lake, or League City and you’re wondering, “Is this new One Big Beautiful Bill Act going to help me or surprise me?”—you’re not alone.
The One Big Beautiful Bill Act (OBBBA) is full of changes that can either quietly cost you money—or create opportunities—depending on how proactive you are.
To help you sort through it, we’ve created a detailed checklist you’ll find at the end of this blog and as an attached PDF resource. We’ll use that same checklist in our one-on-one meetings to walk through exactly how OBBBA tax planning in 2025 & 2026 applies to your situation.
Big Picture: What the OBBBA Changes Mean for Everyday Taxpayers
At a high level, OBBBA does three big things that matter to most people:
Extends and tweaks the current tax rate structure instead of letting old rules expire, which gives us a bit more predictability when we plan around your marginal tax bracket and retirement withdrawals. (Carr, Riggs & Ingram)
Adds targeted tax breaks for groups like seniors, workers who earn overtime or tips, and people buying certain new vehicles. (IRS)
Reshapes key deductions and credits—charitable giving, the SALT cap, adoption credits, premium tax credits, and more—so that timing and income levels matter even more than before. (IRS)
Our attached OBBBA checklist breaks these changes into topic areas—tax planning, child planning, education, and miscellaneous/estate issues—and then asks practical “Yes/No” questions so we can quickly spot which planning opportunities might apply to you.
Key New Deductions and Credits You Should Know About
Here are some of the changes we’re talking through most often with Presidio clients in the Bay Area suburbs.
Extra Deduction for Seniors
If you or your spouse is 65 or older, OBBBA creates a new senior deduction of $6,000 per eligible person on top of other deductions for tax years starting in 2025. (H&R Block Tax preparation company)
From a planning perspective:
This makes Roth conversions, capital gain harvesting, and strategic IRA withdrawals more attractive in certain income ranges. However, the additional deduction begins to phaseout when your taxable income reaches $150,000/year.
It also means we might be able to realize more income each year without bumping you into an uncomfortable tax bracket.
Our checklist specifically asks if you or your spouse are 65+ so we can factor this into your retirement-income strategy.
Below-the-Line Charitable Deduction (Starting in 2026)
Beginning in 2026, OBBBA introduces a new charitable deduction for taxpayers who don’t itemize, up to $1,000 for single filers and $2,000 for married couples. At the same time, it adds a 0.5% AGI floor for itemized charitable deductions, which will matter more for higher-income givers. (Kiplinger)
Paired with the checklist:
If you’re “charitably inclined and taking the standard deduction,” you may now be able to get a tax benefit for gifts that previously didn’t move the needle.
For high-income donors, we’ll look at whether it makes sense to accelerate major gifts into 2025 and/or use donor-advised funds before the new floor and caps fully kick in. (Kiplinger)
SALT Cap and High-Tax Situations
OBBBA significantly raises the state and local tax (SALT) deduction cap to $40,000 starting in 2025, with modest annual increases through 2029, before reverting back to $10,000 in 2030. The benefit begins to phase out once your MAGI exceeds $500,000. (Thomson Reuters Tax)
Even in Texas (where we don’t have a state income tax), this matters if:
You pay substantial property taxes on your home (or homes) in the Bay Area suburbs.
You’re considering buying a second home—say, a place in Galveston or another higher-tax area.
You’re evaluating big moves like Roth conversions or realizing large capital gains in 2025–2026.
Our checklist prompts us to ask whether you live in, or are planning to move to, a higher-tax state and how close your income is to those SALT phase-out thresholds.
New Deductions for Tips, Overtime, and Car Loan Interest
If you or a spouse earns a meaningful portion of income from tips or overtime, or if you plan to finance a new vehicle assembled in the U.S., OBBBA adds three new planning levers:
A deduction for qualified overtime pay (subject to MAGI phaseouts).
A deduction for certain tip income, again phased out at higher MAGI levels. (IRS)
A car loan interest deduction—up to $10,000 per year in interest on qualifying new vehicles purchased between 2025–2028, also phased out at MAGI above $100,000 (single) / $200,000 (MFJ). (IRS)
Our OBBBA checklist calls this out directly:
We confirm that your tips and overtime are being accurately captured on your pay stubs and W-2.
We evaluate whether you’re in the MAGI “sweet spot” where these deductions actually work for you.
If you’re planning a vehicle purchase anyway, we’ll look at whether it makes sense to time that purchase during the 2025–2028 window and how much debt (versus cash) to use.
Planning for Families and Kids Under OBBBA
Houston-area families benefit from several child- and education-related changes under the law.
Enhanced Child Tax Benefits
Our checklist highlights that if you claim any children as dependents, OBBBA:
Increases the Child Tax Credit to $2,200, with a refundable portion of $1,700, boosting potential refunds for qualifying families.
Introduces a $1,000 “Trump Account” credit (per child born in 2025 or later) that has to be claimed by opening an approved account before the child turns 18.
From a planning standpoint, we’ll talk about:
Making sure new parents actually open the account—the credit is not automatic.
Coordinating that with 529 plans, education savings, and your long-term gifting strategy.
Childcare and Dependent Care Flexibility
If you pay for daycare, after-school programs, or a nanny, OBBBA expands your tools:
Dependent Care FSA limit increases to $7,500 starting in 2026.
The Child and Dependent Care Credit is enhanced and can range from 20–50% of qualifying expenses, depending on income.
We’ll compare:
Whether you’re better off using the FSA, the tax credit, or some combination.
How this fits into cash-flow planning and whether your employer’s benefits package needs to be updated to take full advantage.
Adoption and Education Planning
For families planning to adopt:
OBBBA makes up to $5,000 of the $17,280 adoption tax credit refundable, which can be powerful for families with lower current tax liability. (IRS)
For education:
Beginning in 2026, you can use up to $20,000 per year per child from a 529 plan for K–12 expenses—a significant boost for private school families.
529 plans can now be used for a more expanded list of qualified education: trade schools, professional certificates, and continuing-education programs.
Health Coverage, Premium Tax Credits, and the New “Cliffs”
OBBBA doesn’t just touch taxes—it also changes health coverage rules that flow through your tax return.
For those using Marketplace coverage (HealthCare.gov or the Texas exchange), a big theme is the return of a steep Premium Tax Credit “cliff” around 400% of the Federal Poverty Level starting in or after 2026. (healthinsurance.org)
Practically, that means:
Even a small increase in income—a Roth conversion, a one-time bonus, extra consulting work—can cause you to lose the entire Premium Tax Credit and lead to a nasty surprise at tax time.
Our checklist specifically flags this for anyone on Marketplace plans, reminding us to look at MAGI-reduction strategies (retirement plan contributions, HSA/FSA contributions, tax-free or lower-tax income sources).
This is where planning matters: sometimes we’ll advise keeping income below the cliff this year and then “making up” the tax work in a different year when it doesn’t jeopardize your health-coverage subsidy.
Business Owners, ISOs, and Depreciation
If you own a business, receive incentive stock options (ISOs), or plan to make big capital purchases, OBBBA offers several levers:
100% bonus depreciation remains available on qualifying business assets, letting you fully expense certain purchases rather than spreading depreciation over many years. (Carr, Riggs & Ingram)
Changes to the Alternative Minimum Tax (AMT) can affect how and when you exercise ISOs. The checklist prompts us to discuss whether it makes sense to accelerate ISO exercises under more favorable AMT thresholds before new ones fully phase in.
For local business owners and professionals (engineers, physicians, small-firm owners, etc.) in the Houston Bay Area:
We’ll coordinate with your CPA to decide when to pull the trigger on large equipment purchases, how to structure compensation, and how ISOs fit into your broader retirement and tax strategy.
Estate, Legacy, and Long-Term Planning
One thing that trips up many high-net-worth families is assuming the estate tax rules will “go back to normal” soon. OBBBA instead makes a higher estate and gift lifetime exemption permanent starting in 2026, with the basic exclusion amount increasing to around $15 million (indexed going forward). (AICPA & CIMA)
Combined with our checklist, we’ll consider:
Whether existing estate plans (older trusts, bypass structures) still make sense or need simplifying.
How to use annual exclusion gifts, 529 funding, or charitable strategies to shape your legacy while staying within the new, higher limits.
For many Presidio clients, this is also where we align your estate plan with your values: which causes matter to you, how you want to support kids and grandkids, and how to do that in a tax-aware way.
Bringing It All Together: Your OBBBA Checklist and Next Steps
OBBBA is a big law—with changes that touch everything from overtime pay and EVs to adoption credits, Marketplace subsidies, and estate taxes. No single article can cover every nuance, but that’s exactly why we built and licensed the detailed “What Important Issues Should I Consider Regarding Changes Made by the OBBBA?” checklist you’ll see attached to this blog.
Here’s how we’ll use it together:
Walk through each section—tax planning, child planning, education, health/Marketplace, business/estate.
Mark “Yes/No” on each question to quickly identify which provisions apply to you.
Prioritize the opportunities and risks based on your income level, life stage, and goals.
Coordinate with your CPA so tax filing and tax planning are working from the same playbook.
Update your financial plan and investment strategy to reflect the new tax environment for 2025 and 2026—not just what worked under the old rules.
At Presidio Financial, we’re here in the community with you—helping Houston Bay Area families and retirees stay disciplined, invest in globally diversified portfolios, and make smart, evidence-based decisions about their money and their taxes.
If you’re curious—or concerned—about how OBBBA tax planning in 2025 & 2026 affects your situation, let’s talk. You can schedule a quick call, bring in your latest tax return, and we’ll use the attached OBBBA checklist to start putting a tailored game plan together.
