The One Big Beautiful Bill Act (OBBBA) was signed by President Donald Trump on July 04, 2025. This article will focus on key tax aspects that affect upper-middle-income families.

The tax rates that were lowered by the Tax Cuts and Jobs Act (TCJA) of 2017, whose provisions took effect on January 01, 2018, and were due to expire after 12/31/2025. These lower tax rates became permanent under OBBBA. The standard deduction was almost doubled under TCJA and will become permanent under OBBA with a slight increase. For 2025, the standard deduction for a single taxpayer or married filing separately rises from $15,000 to $15,750 and rises from $30,000 to $31,500 for married filing jointly or qualified surviving spouse. For those who are age 65 and older or blind, there is an additional $2,000 standard deduction for single filers and head of households; and $1,600 for each spouse who file married joint or separate.

In addition to the standard deduction, the OBBA begins a temporary senior citizen deduction of $6,000 for taxpayers aged 65 and older, available from 2025 through 2028. This is on top of the regular standard deduction and is available to both those who itemize and those who take the standard deduction. However, this $6,000 additional deduction phases out for higher earners, starting at a Modified Adjusted Gross Income (MAGI) of $75,000 for single filers and $150,000 for married couples filing jointly. This becomes ZERO for singles with a MAGI of over $175,000 and married couples with MAGI over $250,000.

Commercial Solar Tax Credit Saved: The 30% (or higher) solar tax credit for commercial solar projects was saved by a last moment compromise forced by Alaska Senator Lisa Murkowski. For commercial solar, if the project is started before 7/4/2026 (one year after Trump signed the OBBA on 7/04/2025), the project must be completed within four years. If the project was started after 7/04/2026, it must be completed and “placed in service” by 12/31/2027. The 30% solar tax credit for residential only is available if the solar is installed on your rooftop by 12/31/2025.

Impact on Roth IRA Conversions: Taxpayers have been able to do big Roth IRA Conversions and not pay any federal income tax by using the massive commercial solar tax benefits. Example: a married taxpayer filing joint has 2025 taxable income of $100,000 wants to do a $400,000 Roth IRA Conversion, which raises the taxable income to $500,000 and $114,126 of federal income tax. If they buy three pieces of $70,000 commercial solar equipment, there’s a $178,500 tax deduction, reducing taxable income to $321,500. The federal tax would be $62,854, but there’s also a $63,000 solar tax credit that reduces federal tax to $0. There is also annual income from the solar equipment.

Now $400,000 of the husband’s traditional IRA or 401k is a Roth IRA, which is the Holy Grail of tax planning. For the rest of his life, no matter how much he earns, there is NO tax and NO Required Minimum Distributions (RMDs). After he dies the wife can inherit his Roth IRA and there is NO tax for the rest of her life; and for the first 10 years the kids inherit her Roth IRA.

Free Tour/Workshop at Solar Reefer (Refrigeration) Factory: Saturday, 8/02/2025 OR  8/16/2025, 9am–12 noon.  Topic is “How Solar Reefers can Reduce Taxes to $0 and earn a steady 10-14%!” Lots of tasty refreshments served!

Location is at Advanced Energy Machines: 4245 E. Norcroft Street, Mesa, AZ 85215, ¼ mile SW of McDowell & Greenfield Roads.

To RSVP for the seminars or schedule a free consultation, please contact Dr. Harold Wong at (480) 706-0177 or This email address is being protected from spambots. You need JavaScript enabled to view it.. His website is www.drharoldwong.com.

Dr. Wong earned his PhD in Economics at UC Berkeley in 1974 and passed the National CPA exam in 1979. He has appeared on over 400 TV/Radio programs.