The potential tax savings for high net worth individuals is a major feature of President Donald Trump’s “One Big Beautiful Bill Act.” Wealthy taxpayers should be aware of these opportunities and consider how the new law may affect their income, investments, and retirement planning. Call or visit your Hallandale asset protection lawyer at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. today to learn how the new federal tax law may impact your personal finances and long-term wealth strategies.
Income Tax Rates
Before the passage of the new federal tax bill, the highest marginal income tax rate of 37%, established in the 2017 Tax Cuts & Jobs Act (TCJA), would have expired as of December 31, 2025. As a result, income tax rates would have increased. However, the new tax bill makes the TSJA tax rate cuts permanent, along with preserving the top marginal tax rate of 20% for capital gains and qualified dividends.
The new tax bill also limits itemized deductions for individuals whose income falls in the highest income tax bracket of 37%. These individuals will now be limited to a 35% benefit for their itemized deductions. Furthermore, the bill places new restrictions on charitable deductions for high-income taxpayers.
The new tax bill keeps the current corporate income tax rate of 21% in place, which is a benefit to U.S. business owners. Compared to other industrialized countries, this tax rate is low, making it attractive for foreign investment through U.S. companies.
Alternative Minimum Tax Changes
Individuals whose income is subject to alternative minimum tax (AMT) and file taxes as married filing jointly or as a surviving spouse will have increased income subject to AMT due to changes in the new tax bill. First, the bill alters the AMT income exemption phaseout threshold. In 2025, this threshold is $1,252,700, but in 2026, this amount resets to the pre-TCJA threshold of $1 million. Again, this change affects ONLY the filing status of married filing jointly or as a surviving spouse, NOT any other filing status.
Additionally, the exemption phaseout percentage changes from 25% to 50%. As a result of these two changes, affected individuals will have an increased amount of income taxable under AMT, as well as more income subject to the higher tax bracket of 28%.
These changes are particularly pertinent for individuals who receive equity-based compensation awards. Fortunately, engaging in proper planning strategies can help reduce the impact of these changes on the amount of taxable income.
Qualified Small Business Stock (QSBS) Exclusion
Under the previous law, investors derived no benefit from the qualified small business stock (QSBS) exclusion unless the issuing company’s aggregate gross assets were less than $50 million at the time of issuance. The new tax bill, which applies to all capital gains from QSBS issued after July 4, 2025, broadens the exclusion to include issuing companies with aggregate gross assets of less than $75 million. Additionally, the previous maximum excludable gain from QSBS was $10 million, but the new bill raises the maximum exclusion to $15 million.
Furthermore, 50% of QSBS gain is excludable from gross income for shares held for a minimum of three years, 75% is excludable for shares held for a minimum of four years, and 100% is excludable for shares held for five years or more.
Federal Gift, Estate, and Generation-Skipping Transfer (GST) Taxes
The new tax bill left federal gift, estate, and GST taxes largely unchanged. For instance, the bill did not alter the maximum federal gift, estate, and GST tax rate of 40%. However, as of January 1, 2026, the bill permanently raises the federal exemptions for gift, estate, and GST taxes to $15 million per individual, which is available for U.S. citizens and non-citizens domiciled in the U.S. The exemption amounts will adjust annually for inflation.
The current federal gift, estate, and GST exemptions are $13.99 million in 2025, due to inflation adjustments from the 2017 TCJA amount of $10 million. The new law eliminates the potential for the TCJA exemption amounts (as indexed for inflation) to expire in 2026, which would have substantially reduced the amount of wealth that individuals could pass on to their heirs via inheritance.
Wealth Preservation Planning
The new federal tax bill has created new opportunities for high net worth individuals to engage and benefit from estate and financial planning. As a result, high net worth individuals and families should carefully review their estate plans with experienced estate planning counsel to ensure that they can reap the full benefits of the higher gift, estate, and GST tax exemptions in 2026. The higher exemption limits may allow families to focus their financial planning strategies on issues other than taxes, such as protecting assets from potential creditors and divorces, managing assets, creating business succession plans, and meeting charitable giving objectives.
Frequently Asked Questions (FAQ)
Why is now a strategic time for high net worth individuals and families to revisit their estate plan?
With the federal gift, estate, and GST exemptions permanently increasing to $15 million per individual in 2026, high net worth families have a unique window to optimize wealth transfer strategies. Updating estate plans now allows individuals to take full advantage of the higher exemptions, potentially reducing future tax burdens and enhancing legacy planning. It’s also an opportunity to align financial goals with asset protection, charitable giving, and business succession objectives.
What types of businesses benefit most from the expanded QSBS exclusion?
Startups and growth-stage companies in technology, healthcare, and clean energy sectors often benefit most from the qualified small business stock (QSBS) exclusion. With the asset threshold for issuing companies raised to $75 million and the maximum gain exclusion increased to $15 million, investors in these companies can now enjoy more favorable tax treatment—especially if they hold shares for three to five years. This change encourages long-term investment in innovative U.S.-based businesses.
How can high net worth individuals proactively plan for the new AMT changes?
High net worth individuals affected by the Alternative Minimum Tax (AMT) changes—particularly, those filing jointly or as surviving spouses—should consider timing strategies for income recognition and deductions. Equity-based compensation, such as stock options, may need to be restructured or exercised strategically to minimize exposure. Working with a tax advisor or asset protection attorney can help tailor a plan that accounts for the increased exemption phaseout and higher AMT rates.
Secure Your Wealth—Start Protecting Your Assets Today
At Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A., we understand the unique challenges high-net-worth individuals face under the new tax bill. Our experienced Boca Raton asset protection attorneys are here to help you safeguard what matters most—your family, your business, and your legacy. Whether you’re concerned about estate planning, business succession, or shielding assets from potential liabilities, we can guide you through the most effective legal strategies. Call us today at (954) 966-2112 or contact us online to schedule a confidential consultation and take the first step toward securing your financial future.