One Big Beautiful Bill Act

New Tax Legislation: Key Changes That Impact KML Families and Donors

In our latest vlog episode, KML Foundation Board Member and CPA Josh Boeldt joined us to break down the major tax legislation passed in July 2025, known as the "One Big Beautiful Bill" (OB3). This comprehensive legislation extends many provisions from the 2018 Tax Cuts and Jobs Act while introducing over 100 new tax changes that will affect individuals and families across the country.

Key Changes for Charitable Giving and Estate Planning (Starting 2026):

• Above-the-line charitable deduction up to $2,000 for married couples filing jointly ($1,000 for single filers)

• Benefits available even for those taking the standard deduction

• New 0.5% adjusted gross income floor for itemized charitable deductions

• Unused charitable deductions can carry forward to future years

• Estate tax exemption maintained at higher levels: $15 million for individuals, $30 million for married couples

  
  

New "Trump Accounts" for Children:

• Up to $5,000 annual contributions allowed for children under 18

• Tax-deferred growth similar to traditional IRA accounts

• Funds cannot be distributed until child reaches 18

• Special bonus: $1,000 government contribution for children born 2025-2028

  
  

Additional Benefits:

• No tax on qualified tip income up to $12,500 single/$25,000 joint (with restrictions)

• Overtime pay deduction for qualified overtime up to $12,500 single/$25,000 joint

• Child tax credit increased to $2,200

• Standard deduction remains at higher levels ($31,500 for 2025)

  
  

As Josh emphasized, with over 100 provisions in this complex bill, it's essential to consult with tax professionals to understand how these changes might benefit your specific situation. For KML families considering their charitable giving and estate planning strategies, these new provisions offer additional tools to maximize both family wealth building and philanthropic impact.

For questions about how these changes might impact your giving strategy or to discuss estate planning opportunities with the KML Foundation, contact Dylan Rusch at dylan.rusch@kmlhs.org.