{"id":246770,"date":"2025-10-28T17:18:17","date_gmt":"2025-10-28T17:18:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/246770\/"},"modified":"2025-10-28T17:18:17","modified_gmt":"2025-10-28T17:18:17","slug":"arkansas-wealth-advisers-outline-key-impacts-of-the-one-big-beautiful-bill-act","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/246770\/","title":{"rendered":"Arkansas Wealth Advisers Outline Key Impacts of the One Big Beautiful Bill Act"},"content":{"rendered":"

\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t<\/p>\n

\n\t\t\t\t\t\t\t\t\t\tClark Johnson, financial advisor and partner at Oak Crest Wealth Management (Steve Lewis)\t\t\t\t\t\t\t\t\t<\/p>\n

Ask Clark Johnson how the One Big Beautiful Bill Act will affect taxation and wealth management, and he\u2019ll stop you short.<\/p>\n

\u201cIt\u2019s just a loaded question,\u201d the North Little Rock financial adviser told Arkansas Business this month. \u201cThere are so many things in this bill, hence the name big. So I\u2019ll have to share just some of the biggest impacts.\u201d<\/p>\n

For one thing, the thousand-page OBBBA extends current tax breaks and brackets for individuals. Those were laid out in the 2017 Tax Cuts and Jobs Act during the first Trump administration, and had been set to rise to previous rates at the end of this year. For example, the top marginal tax rate for single filers will remain at 37% rather than reverting to the pre-2017 rate of 39.6%.<\/p>\n

Little Rock financial adviser and analyst Larry Watts called eliminating the \u201c2026 cliff\u201d the biggest relief in the July 4 OBBBA. \u201cThe 2017 reductions in taxes had been set to expire in 2026, and that is no longer the case. So people don\u2019t have to worry so much about it.\u201d<\/p>\n

The standard deduction raised in 2017 will also escape the cliff.<\/p>\n

It went up from $12,700 to $24,000 for joint filers in 2017 and will increase to $31,500 for the current tax year and $32,200 for 2026.<\/p>\n

\u201cMany of the people I\u2019ve talked to had forgotten that the standard deduction had doubled,\u201d Johnson said. \u201cThey just look at me like, \u2018Oh yeah, I did itemize once upon a time.’\u201d<\/p>\n

\"\"<\/p>\n

The OBBBA also spares the lifetime gift and estate tax exemption from being cut in half. Instead of falling to $7 million, in fact, it will increase in 2026 to $15 million \u2014 nearly $30 million for couples \u2014 with yearly inflation adjustments. That provision, as well as a quadrupled deduction for state and local taxes paid, could pay major dividends for higher-wealth taxpayers who plan well, Johnson said.<\/p>\n

\u201cIf your net worth is of a certain size, you get hit with an estate tax, or death tax, as they call it,\u201d Johnson said. \u201cIt starts out around 40%.\u201d<\/p>\n

From the passage of the American Taxpayer Relief Act of 2012 to the TCJA of 2017, the inflation-adjusted exemption ranged from $5.12 million to $5.45 million per individual. For this tax year, it will be $13.6 million per individual and $27 million per couple before rising further next year.<\/p>\n

Estate planning has always involved various strategies beyond trusts alone. While revocable living trusts are valuable for avoiding probate and managing assets during life, they don\u2019t reduce estate taxes.<\/p>\n

Historically, high-net-worth people used lifetime gifting strategies and specialized irrevocable trusts to minimize estate taxes. The higher exclusion under OBBBA means more families can transfer wealth without triggering estate taxes, though trusts remain important for asset protection, probate avoidance, and other non-tax reasons.<\/p>\n

Watts, a Stephens Inc. veteran and owner of Watts Wealth Management, noted that even with a $30 million estate tax exemption a couple with assets of, say, $50 million, would face paying a substantial tax on the remaining $20 million in the estate. \u201cThat would incentivize you to gift some of that now, rather than the heirs being hit with the estate tax and the income tax.\u201d<\/p>\n

The OBBBA maintains the annual gift exclusion at $19,000 per person, per recipient. This means an individual can give $19,000 to any number of people each year without triggering gift-tax reporting rules.<\/p>\n

The law also allows a generation-skipping wealth transfer of $15 million. The GST exclusion involves, for example, a grandparent giving assets to a grandchild.<\/p>\n

Watts said taxpayers may not be aware of changes involving the cost basis applied on inherited assets.<\/p>\n

\u201cIf someone owns Walmart stock and it was worth 10 bucks and now it\u2019s worth 100, the inheritor doesn\u2019t have to pay anything for the capital increase in the value of that stock,\u201d Watts said. \u201cThe step-up in basis rule remains unchanged under OBBBA, which continues to reduce the tax impact and eases the pressure to gift those assets during life.\u201d<\/p>\n

The OBBBA makes state and local tax payments a bigger consideration for taxpayers who itemize deductions. Lawmakers made the SALT deduction a priority to relieve tax burdens on homeowners in high property-tax states, but that relief, without further legislation, will end Jan. 1, 2030.<\/p>\n

\"\"Larry Watts (Photo provided)<\/p>\n

Until then, the deduction will go from $10,000 to $40,000 per year. Other phaseouts depend on income and tax filing status, so financial professionals urge clients to come in and discuss their situations.<\/p>\n

\u201cIn 2028 through 2030 there will be new expiration dates for certain benefits,\u201d Watts said. \u201cThat provides incentives for people to do their estate planning now and take advantages that are available for a few years.\u201d<\/p>\n

The SALT deduction and a new $6,000-per-year deduction for taxpayers above 65 offer prime examples, he said. \u201cSeniors should capitalize on that deduction through 2028,\u201d Watts said. \u201cAnd for the SALT deduction strategy, taxpayers should consult with their tax advisers about prepayment options, since deductibility generally requires that taxes be assessed for the year in which they\u2019re paid. Simply prepaying multiple years may not provide the intended deduction.\u201d<\/p>\n

\u201cI\u2019ll use a real example. I have a house and a condo. My home and my condo combined are about $9,000 a year in property taxes. With proper planning and timing of property tax payments, along with other state and local taxes like income taxes, I can maximize the benefit of the higher $40,000 SALT cap before it reverts back to $10,000. It\u2019s something you don\u2019t want to leave on the table.\u201d<\/p>\n

Johnson said the new deduction for seniors could be \u201chuge\u201d for retirees.<\/p>\n

\u201cI think that\u2019s a really big deal because at least a third of American retirees have Social Security as their only source of income,\u201d he said.<\/p>\n

Johnson urged people who inherit nonspousal IRAs to learn about the OBBBA\u2019s implications.<\/p>\n

\u201cIt used to be where you can continue taking out the required minimum distribution or RMD over your lifetime,\u201d he said. Now the heir gets just 10 years to withdraw the entire balance and should minimize the income tax impact, Johnson said.<\/p>\n

\u201cYou\u2019ve inherited mom or dad\u2019s IRA, and you\u2019ve been told that you can sandbag taking this money out until you\u2019re in a lower bracket once you\u2019ve retired.<\/p>\n

\u201cWell, they come in and say you actually have to take out a little bit every year. It\u2019s not being talked about.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Clark Johnson, financial advisor and partner at Oak Crest Wealth Management (Steve Lewis) Ask Clark Johnson how the…\n","protected":false},"author":2,"featured_media":246771,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":{"0":"post-246770","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/246770","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=246770"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/246770\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/246771"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=246770"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=246770"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=246770"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}