For the past few years, many retirement conversations have centered on one looming question: what happens when the current tax rules expire?
It wasn’t a small concern. The Tax Cuts and Jobs Act’s (TCJA) lower tax brackets, higher standard deduction, and historically large estate exemption were all scheduled to sunset at the end of 2025. The assumption was simple — if nothing changed, taxes would likely go up, and planning decisions needed to happen quickly.
Then Congress stepped in.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. It didn’t just extend the TCJA — it made several of its provisions permanent and, in some cases, improved them. If you’ve been planning around a tax increase, the landscape has changed significantly.
However, “several provisions” is not the same as “all provisions.” For Pennsylvania taxpayers, the details still matter. While the current legislation removes some of the uncertainty, it also changes the way retirement planning decisions should be made going forward. Here’s a closer look at key provisions and where proactive planning still pays off.
The Planning Environment Just Got More Stable
One of the biggest shifts here isn’t a specific number or provision. It’s the fact that the rules themselves are no longer moving targets.
The current income tax brackets are staying in place, including the top 37% rate. The higher standard deduction remains intact and has been increased slightly for 2026. The qualified business income deduction is now permanent. Most of the itemized deduction limits and eliminations introduced by TCJA remain in place under the new law.
That kind of consistency matters more than most people realize.
When the rules are constantly changing, planning becomes reactive. You’re adjusting to what might happen instead of making decisions based on what is likely to hold. Now, you can model retirement income, withdrawal strategies, and tax decisions with a higher degree of confidence based on current law.
Of course, this kind of stability doesn’t mean the answers are simple; it just means they’re more reliable, at least for the next few years.
The Estate Tax “Cliff” Turned Into an Opportunity
Estate taxes sparked significant concern among taxpayers, with many wondering about the TCJA’s sunset.
Before the law changed, the federal exemption was expected to drop from roughly $14 million per person to closer to $7 million, creating a wave of urgency around gifting strategies and estate planning decisions.
That scenario never played out.
Instead, the estate tax exemption increased to $15 million per individual, or $30 million for married couples, with future adjustments tied to inflation.
In practical terms, that removes significant pressure for many families. The “use it before it disappears” mindset no longer drives decisions the way it did a year ago.
That said, this isn’t a reason to ignore estate planning. As with any tax legislation, future changes are always possible. Assets that continue to grow inside your estate can still create tax exposure later. State-level estate rules haven’t changed, and in some cases remain more restrictive than federal law. The difference now is that planning can be more deliberate. You’re not racing a deadline. You’re making decisions based on what actually improves your long-term outcome.
Why “Clawback” Usually Isn’t Something to Fear If You Planned Ahead
If you made significant gifts before the end of 2025 by moving assets to family, funding trusts, or making large transfers, you may be wondering whether those decisions still hold up now that the rules have changed.
For many families, the answer is generally yes.
The IRS put clawback protections in place years ago specifically to address this. If you made completed gifts using the higher exemption and those assets genuinely left your estate, your estate tax calculation will still reflect the benefit of that exemption — even if the exclusion amount is lower when you pass away. In other words, a future change in the law can’t reach back and penalize you for doing the right thing at the right time.
That said, not every strategy works the same way. Arrangements where you retained some control, or where the IRS might argue the assets never truly left your estate, can be treated differently. If your plan involved anything beyond straightforward gifting, it’s worth a review to ensure everything is structured as needed.
What This Means for Pennsylvania Business Owners
One of the less-discussed wins in the new legislation is the permanence of the qualified business income deduction, often referred to as the QBI deduction or Section 199A.
Since 2018, eligible business owners operating through pass-through structures, such as sole proprietorships, partnerships, S corporations, and certain trusts, have been able to deduct up to 20% of their qualified business income. It was always designed to be temporary. Now it’s not.
For business owners approaching retirement, this matters in a few ways. The QBI deduction can affect how income is structured in the years leading up to a sale or transition. It can also interact with retirement account contributions.
The deduction has real complexity; limitations apply based on the type of business, wages paid, and other factors, but the foundation is now permanent. That’s a meaningful shift for tax planning for affluent families in PA who have business income as part of their retirement picture.
Three Things Worth Reviewing Before Mid-Year
The tax code just went through one of the most significant updates in years. Whether that changes your situation dramatically or just confirms what you already had in place, it’s worth a deliberate review with an experienced financial advisor. Here are three places to focus during that conversation:
Your estate plan. If it was built around a sunset that didn’t happen, or an exemption level that has now changed, the underlying decisions may still be sound, but the structure around them deserves a second look. The $15 million individual exemption changes what’s possible, not just what’s urgent.
Your income and withdrawal strategy. With brackets locked in, multi-year planning becomes more straightforward. If you haven’t mapped out the next several years of retirement income, including Social Security timing, required minimum distributions (RMDs), Roth conversions, and any business distributions, now is a good time to do it with current numbers.
Your business structure, if applicable. The permanent QBI deduction is only valuable if your entity structure and compensation design are set up to take full advantage of it. It’s worth confirming that the planning you’ve done still holds under the new rules.
Let’s Review Your Current Financial Plan
The headlines around the 2026 tax cliff made it sound like retirement planning was heading into difficult territory. For most families, it didn’t turn out that way.
However, it’s important to remember that the families who end up in the best position typically aren’t the ones who reacted to every headline. They’re the ones who had a plan, kept it current, and made decisions based on their actual situation rather than worst-case scenarios.
If you’re thinking through how changes like this may impact your situation, a second perspective can be helpful. We’re always happy to have that conversation.
This communication is provided by Wyze Wealth Advisors LLC, a registered investment adviser. All material is for informational and educational purposes only and should not be considered personalized investment advice.
Any examples or scenarios presented are illustrative and may not reflect actual results. Individual outcomes will vary based on personal circumstances, and assumptions may change over time.
Decisions should be made based on an individual’s objectives, financial situation, and needs. Additional information about our services, fees, and Form ADV Part 2A is available upon request.
