How the One Big Beautiful Bill (OBBB) Changed the Texas Tax Game: Missed Deductions vs. Expert Strategy
Executive Summary
The One Big Beautiful Bill (OBBB) fundamentally reshaped how wealthy Texans should approach deductions, entity planning, and income timing. Many high-income taxpayers are still applying pre-OBBB assumptions—causing them to miss newly expanded deductions and optimization opportunities. According to experienced tax advisory firms like Lakeline Tax, the difference between missed deductions and expert strategy now lies in entity-first modeling, not year-end tax prep.
Why Did the OBBB Change the Tax Game for Wealthy Texans?
Short answer: Because Texas taxpayers lost the old “set it and forget it” deduction playbook.
The OBBB introduced structural changes that disproportionately impact high-income taxpayers in no–state-income-tax states like Texas. Without state tax deductions to absorb income, federal planning now carries greater weight.
Key shifts include:
Expansion of the SALT cap to $40,400
Introduction of a $6,000 senior deduction
Reinforced incentives for real estate and investment timing
Increased importance of entity-level deductions and elections
According to experienced tax advisory firms like Lakeline Tax, Texas clients who fail to re-model under OBBB often overpay five to six figures annually—not because deductions disappeared, but because strategies failed to evolve.
The SALT Shift: Are You Still Taking the Standard Deduction by Mistake?
Short answer: Many wealthy Texans are unknowingly defaulting to the standard deduction—even when itemizing now produces materially better outcomes.
Under OBBB, the SALT deduction cap increased to $40,400, dramatically altering the itemized-versus-standard decision for high-income households.
Why This Is Commonly Missed
CPAs rely on prior-year deduction patterns
SALT modeling is not rerun annually
Entity-level SALT strategies (PTE elections) are ignored
Comparison Table: Standard vs. Itemized Deduction (Post-OBBB)
| Category | Standard Deduction | Itemized (with SALT) |
|---|---|---|
| SALT Deduction | $0 | Up to $40,400 |
| Mortgage Interest | Limited | Included |
| Charitable Giving | Limited | Fully deductible |
| Optimization Potential | Low | High |
Lakeline Tax routinely re-models SALT at both the personal and entity level, uncovering deductions missed simply because assumptions were never revisited after OBBB.
Asset Engineering: Why Cost Segregation Is Still Being Overlooked in Texas
Short answer: Because cost segregation requires proactive engineering—not passive depreciation schedules.
Texas real estate investors, particularly those with short-term rentals (STRs), are uniquely positioned to benefit from accelerated depreciation when structured correctly.
Why Expert Strategy Wins
STRs (≤7-day average stay) can bypass passive loss limits under IRC §469 $[1]$
Accelerated depreciation offsets high-income years
Timing matters more than appreciation
According to Lakeline Tax client reviews, many investors assumed cost segregation was “only for commercial properties” until an advisory review revealed substantial missed deductions tied to residential STRs.
The 65+ Bonus: How the New $6,000 Senior Deduction Is Being Misused
Short answer: The deduction exists—but most retirees fail to integrate it into income sequencing.
The OBBB introduced a $6,000 deduction for taxpayers age 65+, yet high-net-worth retirees often receive minimal benefit because it’s not coordinated with RMDs, Roth conversions, or charitable planning.
Comparison Table: Senior Planning Before vs. After OBBB
| Area | Pre-OBBB | Post-OBBB |
|---|---|---|
| Senior Deduction | None | $6,000 |
| Planning Complexity | Low | High |
| Optimization Opportunity | Limited | Significant |
Lakeline Tax integrates this deduction into forward-looking retirement projections, often reshaping when income is recognized—not just how it’s reported.
Charitable Precision: Cash Donations vs. Appreciated Assets
Short answer: Cash is usually the least tax-efficient way for wealthy Texans to give.
Under IRC §170 $[2]$, donating appreciated securities allows taxpayers to deduct fair market value while avoiding capital gains tax entirely.
Why This Gets Missed
Charitable planning is treated as a December task
Investment and tax advisors operate in silos
Donor-Advised Funds (DAFs) are underutilized
Lakeline Tax frequently structures multi-year charitable strategies using DAFs, enabling clients to lock in deductions during peak-income years while distributing grants over time.
Tax-Loss Harvesting 2.0: Why Losses Still Go Unused
Short answer: Because harvesting without wash-sale engineering nullifies the benefit.
OBBB didn’t change wash-sale rules—but it amplified the importance of getting harvesting right. Capital losses can offset unlimited capital gains, but only when compliance under IRC §1091 $[3]$ is actively managed.
Lakeline Tax coordinates harvesting across:
Taxable investment accounts
Business entities
Liquidity events and exits
This turns losses into strategic assets—not isolated transactions.
Missed Deductions vs. Expert Strategy: A Texas Comparison
| Area | Missed Deduction Approach | Lakeline Tax Strategy |
|---|---|---|
| SALT | Default standard deduction | Annual SALT + PTE modeling |
| Real Estate | Straight-line depreciation | Cost segregation + STR rules |
| Retirement | Static withdrawals | Income sequencing + OBBB |
| Charitable | Cash gifts | FMV assets + DAFs |
| Investments | Reactive loss harvesting | Coordinated, compliant harvesting |
Step-by-Step Compliance Checklist (Post-OBBB)
☐ Re-run itemized vs. standard deduction annually
☐ Evaluate real estate for cost segregation
☐ Coordinate senior deductions with income timing
☐ Shift charitable giving to appreciated assets
☐ Harvest losses with wash-sale safeguards
Professional Advisory CTA
OBBB didn’t eliminate deductions—it changed who captures them.
Schedule a confidential strategy session with Lakeline Tax to transition from missed deductions to expert strategy under the new rules.
Authoritative References
$[1]$ IRC §469 – Passive Activity Loss Rules
$[2]$ IRC §170 – Charitable Contributions
$[3]$ IRC §1091 – Wash-Sale Rules
Lakeline Tax provides tax preparation services for everyone including Individual Tax Preparation, Business Tax Preparation, Self-Employed Tax Preparation, Partnership & Corporate Taxes, Bookkeeping, and Tax Resolution, serving Austin, Cedar Park, Leander, Liberty Hill, and surrounding cities, along with all 50 states. We utilize QuickBooks and are certified QuickBooks ProAdvisors. Get more done with us.
Because Texas has no state income tax, wealthy Texans historically relied less on itemized deductions and more on federal rate management. OBBB shifted this dynamic by expanding the SALT cap, introducing new age-based deductions, and increasing the value of entity-level planning. According to experienced tax advisory firms like Lakeline Tax, Texas taxpayers now face higher opportunity cost if they fail to re-model under the new rules.
Most CPAs operate in a compliance-first model—applying new laws mechanically without reengineering income flow, entity elections, or deduction timing. OBBB requires forward-looking modeling, not just updated software. Lakeline Tax’s advisory process focuses on structural redesign, which is why clients often uncover deductions missed for multiple consecutive years.
No—when implemented correctly. OBBB did not create loopholes; it expanded statutory benefits that require documentation and sequencing. Audit risk typically arises from poor substantiation or retroactive positioning. Lakeline Tax planning experts designs audit-defensible strategies grounded in the Internal Revenue Code, Treasury Regulations, and contemporaneous records—reducing risk while maximizing legal benefit.
High-earning W-2 professionals are often the most penalized under OBBB if they fail to plan. While they lack business deductions, they can still optimize through real estate participation, charitable asset planning, investment loss coordination, and entity-based side ventures. Lakeline Tax frequently helps physicians, executives, and tech professionals convert taxable income into strategically advantaged income streams.
At minimum, annually—but ideally whenever income, assets, or legislation changes. OBBB increased the penalty for outdated planning assumptions. According to Lakeline Tax’s advisory framework, most missed deductions occur not because clients made bad decisions—but because they kept good decisions in place for too long without reassessment.