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One Big Beautiful Bill for Expats

Daniel Weiss CFP® EA

July 4 is typically a time to make memories with family, BBQ in the backyard, relax on the beach with friends, and watch fireworks while consoling your scared canine companion that the noise will soon end. Even though I spend most of the year in Singapore, I always try to be back in the US for this special time.

This year, another event occurred on this same day: the signing into law of the One Big Beautiful Bill (OBBB). This comprehensive legislation encompasses fiscal policy, Medicare, student loans, and taxation, among many other topics that affect US persons daily. Below, are 10 of the major changes that apply to US persons living abroad.

  1. Income Tax Brackets—This bill made permanent the lower individual income tax brackets introduced in the 2017 Tax Cuts and Jobs Act (TCJA). Without the OBBB passing, income tax brackets in 2026 would have reverted to pre-2018 levels, which would have caused income taxes to go up. This is due to the previous tax rates rising quicker and the top marginal rate being higher. The effect is that you will likely owe less tax than you would have owed beginning in 2026. For those living abroad in a low tax country, it is particularly relevant since you may still owe US tax on top of your local jurisdiction’s tax. This is less relevant for those living in a higher tax country.
  2. Estate & Gift Tax Exemption—Similar to the above, the federal estate and gift tax exemption was scheduled to decrease to pre-2018 levels next year. This would have been a reduction from the current $13,990,000/person to half of that, bringing many more people into 40% estate tax territory. However, the bill extends the higher exemption and even increases it slightly to $15,000,000/person ($30,000,000 between a couple). There are still several states with some form of estate or inheritance tax in the US. Abroad, depending on which country you live in, you may still be subject to local estate and inheritance taxes. Many European countries have an exemption far less than this (e.g., UK at £325,000), so it would be beneficial to review your residence country’s rules.
  3. GILTI’s New Name—In order to prevent US companies from offshoring profits, the TCJA created Global Intangible Low-Taxed Income regulations, which taxes US controlled foreign companies on net undistributed earnings. This has been costly and burdensome for many US persons owning foreign companies. The bill has replaced the endearing moniker of GILTI with Net CFC Tested Income (NCTI). The name changed, but there were no major changes to the regulations.
  4. Remittance Tax—There is now a 1% transfer tax from consumers in the US to persons outside of the country. However, this primarily applies to transfers of cash, money orders, and cashier’s checks. Exempt transfers include those from a US bank account, US deposit or credit card, and digital payment apps like Zelle or PayPal. Meaning, that for most US expats who use a regulated financial institution to transfer money overseas, this will likely not apply.
  5. 529 Plans—For those who have a significant amount of education expenses pre-university, the annual limit of 529 Plan eligible expenses from K-12 has increased from $10,000 to $20,000. Also, the expenses covered have widened to include books, tutoring, standardized tests, and enrolment fees. With high international school costs in many foreign countries, this can be of benefit especially for those who invested early or have seen significant growth.
  6. Trump Accounts—For those who want to do legacy planning for their children or grandchildren, beginning in 2026, these accounts will be accessible. Up until a chid turns 18 years old, $5,000/yr can be contributed to it without any earned income requirements for the child (sometimes a limitation for Roth IRAs). Funds within the account are primarily invested in US equities, and there is tax-deferral on the growth. This could be a good vehicle take advantage of tax-deferred growth, particularly for children who have a long time-horizon.
  7. State & Local Tax (SALT) Deduction—The SALT cap was one of the biggest points of contention, particularly in high tax states like New York, New Jersey, and California. The limit of deductible taxes has increased from $10,000 to $40,000 for 2025 through 2029 (with a 1% annual increase). While this is significant, it likely impacts expats less since they generally pay less SALT taxes; foreign jurisdiction’s taxes are not relevant for this provision. The deduction phases out for those with Modified Adjusted Gross Income (MAGI) over $500,000 and is limited to $10,000 for MAGI over $600,000.
  8. Age 65+ Deduction—From 2025 through 2028, there is an additional tax deduction for those age 65+ of $6,000 ($12,000 for joint filers). This is available regardless of whether you utilize the standard deduction or itemize. It phases out for those whose MAGI exceeds $75,000 ($150,000 for joint filers).
  9. No Tax on Overtime—For those who work overtime, from 2025 to 2028, there is a deduction of up to $12,500 ($25,000 for joint filers) for wages paid as part of overtime compensation. This phases out for those whose MAGI exceeds $150,000 ($300,000 for joint filers).
  10. No Tax on Tips—For those earning tips, up to $25,000 of tip income is deductible from 2025 through 2028. This benefit also phases out for those whose MAGI exceeds $150,000 ($300,000 for joint filers).

This was a major piece of legislation, and the implications will have a far-reaching effect for years to come. While this does not go into all aspects of the bill, it should provide an overview, particularly for expats, on some considerations for your personal finances.

For more information on how this tax bill affects you and your cross-border financial journey, please reach out to one of our wealth planners.


This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual. Additionally, you should consult with your Financial Advisor, Tax Advisor, or Attorney on your specific situation. The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, or Association. All efforts have been made to report or share true and accurate information. However, the information may become materially outdated or otherwise rendered incorrect due to subsequent new research or other changes, without notice. The author nor the firm are able to always verify the content from third-party sources. For additional information about the firm, please visit the MAS Website at https://www.mas.gov.sg/  and the SEC Website at www.adviserinfo.sec.gov. For a copy of the firm's ADV Part 2 Brochure, please contact us at info@avriowealth.com.