How the OBBB Impacts High Earning FAANG Employees

My Quick and Selfish Take

Hey FAANG FIRE,

Well, it happened. The One Big Beautiful Bill (OBBB) was signed into law by the President on July 4th. You don’t need me to tell you about the drops in Medicare eligibility or increases in the deficit. While the news is busy covering the big picture, I wanted to view it through a narrower, more selfish lens:

How does the OBBB actually impact high-earning FAANG W2 employees?

It is still early, and much analysis remains. My biggest takeaway is that, at least now, we have a small bit of stability in the tax code for the next few years.

There are some things we do know and my initial thoughts:

• Federal Income Tax Rates largely remain the same as in 2025. It locks in the federal rates that were set to expire this year and makes them permanent.

  • FAANGFIRE Thoughts: Certainty in the tax rates is nice. Knowing our tax burden will make it much easier to build out my FIRE projections accurately.

• Standard Deduction increases by $750 for single and $1,500 for married to $15,750 for single and $31,500 for married. Inflation adjusted going forward.

  • FAANGFIRE Thoughts: This is a nice little bump that will mean some incremental tax savings for those of us who don’t itemize. Great to see that the married deduction remains double the single, and that it will continue to be inflation adjusted.

• State and Local Tax (SALT) deduction increases from $10,000 to $40,000. However, it begins to phase out at an AGI of $500k, returning to $10,000 by $600k. This change expires in 2029.

  • FAANGFIRE Thoughts: This is a mixed bag. For households with incomes around the $500k mark, who are in a state with high state taxes, this could be worth >$9k in savings. The issue is that the full phase out back to the original $10k of SALT deduction happens at $600k, this is steep cliff. I also don’t like that this is the same limit for single and mfj. It has the potential to increase the marriage penalty.

• Charitable deduction will allow up to $1,000 in donations (single), $2,000 married, even for those who take the standard deduction. Begins in 2026.

  • FAANGFIRE Thoughts: It’s interesting to see a deduction available even for those who take the standard deduction. There are also AGI floors and 35% caps that I don’t yet fully understand.

• Dependent Care FSA limits are increasing by $2,500, from $5,000 to $7,500 (applies to both single and married).

  • FAANGFIRE Thoughts: Nice to see this increased! It hasn’t gone up in nearly 40 years. Unfortunately, it doesn’t look like they changed the 55% benefits test, which often prevents employees from fully taking advantage of the caps. It’s worth splitting this benefit across two people to increase the likelihood of claiming the full amount ($3,750 each for 2026).

• New “Trump Account”, i.e., baby cash in a tax-advantaged accounts that are funded with $1,000 for children born between Jan., 1, 2025, and Jan. 1, 2029.

  • Starting in 2026 all kids under 8 (or 18?) will have access.

  • Max $5,000 in contributions per child each year.

  • Converts to a traditional IRA once the child is 18? Possible $2,500 tax-free if contributions are from your employer.

  • Would be taxed like income at withdraw (on your child’s taxes).

  • FAANGFIRE Thoughts: I don’t understand the point of these accounts. Why would employers make the $2,500 nontaxable contributions? That seems to be the only real benefit, aside from the $1,000 if you’re having a kid. Why would I contribute post-tax money into an account that’s going to be taxed like income when withdrawn?

• Child tax credit increases $200 to $2,200 per child, but phases out at MAGI over $200,000 single and $400,000 married filing jointly. Indexed to inflation going forward.

  • FAANGFIRE Thoughts: Indexed to inflation going forward is good to see. Most of the changes here were for headlines.

• HSA account eligibility increase

  • FAANGFIRE Thoughts: Nice to see HSA eligibility expansion include all bronze and catastrophic plans on healthcare exchanges. There are also some changes around “direct primary care” and “telehealth” that I am curious to watch for the longer term implications.

• Permanently increases the estate and gift tax exemption to $15M for single filers and $30M for married couples, indexed to inflation going forward.

  • FAANGFIRE Thoughts: I love certainty. The estate tax potentially being cut in half next year was being used as a fear-mongering tool. Making the current exemptions permanent and indexing them to inflation will make long-term planning much easier.

• Up to $10,000 per year in interest on car loans is deductible if you earn less than $100k single or $200k married.

  • FAANGFIRE Thoughts: It sounds good politically but has very limited real value. The income phase-out thresholds are low, and the provision expires in 2028.

• Rules around AMT are now permanent.

  • FAANGFIRE Thoughts: It is nice for most FAANG workers to have the privilege to continue not being overly concerned with AMT. Three letters that used to strike fear in many.

• 529 Savings Accounts can be used for additional expenses before college. Previously you could use up to $10k each year to fund K-12 tuition, that has been increased to $20k. It also has increased “qualified expenses”

  • FAANGFIRE Thoughts: The expansion of 529 eligibility seems to be a net good. This increases the value of a 529, more so for those in states that offer tax deductions. Otherwise, the main benefit remains tax free growth (which would be minimal if you are using it to fund K-12 directly). It does make it more useful as a generational gift.

• 1% tax on money order and cashier check based remittances starting in 2026. Excludes US issued debit and credit cards?

  • FAANGFIRE Thoughts: I know many who support parents in their home countries. I’m waiting to read more and better understand the implications.

• Mortgage Interest Deduction remains locked at $750,000 in mortgage debt. It was set to increase to $1.1M.

• No changes to Backdoor Roth IRAs

• No changes to Mega Backdoor Roth 401ks

Closing Thoughts (for now)

Those are the main provisions that I felt were relevant for a FAANG W2 worker. There are a number of other changes affecting corporations, real estate investors, business owners, and Social Security recipients.

What I’m closely watching now is how the Medicare changes will affect all health care plans under the Affordable Care Act and the downstream implications for state exchanges. Health insurance remains one of my largest anticipated FIRE expenses. I have always modeled $0 in subsidies with the assumption that they would eventually go away, become means tested, or have work requirements added.

Side Note: I was secretly hoping that real estate bonus depreciation, opportunity zones, and the short term rental loopholes would go away for good. Unfortunately for me that wasn’t the case. We will have to continue to wade through more pitches to “save on taxes” via real estate. Not only that, there are even more coming in future years. I am not an anti-real estate zealot, I have just seen so many schemes that seem to be real estate concentrated. I’ll continue to go down these rabbit holes so you don’t have to.

-Andre

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Sources Used:

• https://www.congress.gov/bill/119th-congress/house-bill/1/text

• https://taxfoundation.org/research/all/federal/big-beautiful-bill-senate-gop-tax-plan/

• https://www.nytimes.com/interactive/2025/business/trump-tax-bill-personal-finances.html

• https://www.newfront.com/blog/how-the-one-big-beautiful-bill-affects-employee-benefits

• https://www.iwf.org/2025/06/19/trump-accounts-are-a-powerful-way-to-teach-investing-and-saving-to-kids/