Author: Slattery & Holman, P.C.

The United States Postal Service has clarified its postmarking policies in ways that could affect taxpayers who mail their tax returns, payments, or other time-sensitive documents to the IRS. Understanding these changes can help you avoid potential issues with filing deadlines.

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What Changed?

The USPS has formally defined what constitutes a postmark and clarified an important point: the postmark date does not necessarily indicate the first day that the Postal Service had possession of a mailpiece. This means the date stamped on your envelope might not match the day you actually dropped it in the mail.

Most mail is postmarked automatically at regional processing centers, not at your local post office. The date on these automated postmarks shows the date of the first automated processing operation performed on that mail piece. Depending on how long it takes your mail to get from the local post office to one of these centers, that postmark could be a day or two later than when you mailed it.

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Why This Matters for Tax Filings

The IRS typically uses the postmark date to determine whether you’ve met a filing or payment deadline. If there’s a mismatch between when you mailed your documents and when they were postmarked, you could face penalties or interest charges—even though you mailed everything on time.

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What You Can Do

Here are practical steps to protect yourself:

1. Mail Early: The simplest solution is to mail tax documents well before any deadline. Don’t wait until the last day.
2. Request a Manual Postmark: If you’re mailing close to a deadline, visit any Post Office location and request a manual (local) postmark at the counter when you drop off your mail. This service is free of charge and the date on that postmark aligns with the date on which the Postal Service first accepted possession of the mail piece.
3. Get Proof of Mailing: Consider purchasing a Certificate of Mailing, which provides an official receipt showing the date you handed your documents to USPS. For added security, you might use Certified Mail, which includes tracking and proof of delivery.
4. Go Digital When Possible: When possible, file and pay electronically through IRS.gov or approved tax software. Electronic submissions are timestamped immediately and eliminate postmark concerns entirely.
5. Keep Documentation: If you request a manual postmark or purchase a Certificate of Mailing, keep this documentation with your tax records.

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The Bottom Line

The USPS changes don’t reduce your mail options—they simply clarify how postmarks work. By planning ahead and taking advantage of manual postmarks when needed, you can ensure your tax mailings are properly documented and meet IRS deadlines without worry.

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If you have questions about how these IRS mail date changes may affect your tax filings or payments, please contact our office. We’re happy to help you choose the safest and most timely filing option.

 

The IRS has released the inflation-adjusted contribution limits for 2026 (Notice 2025-67). While the increases are generally more modest than in recent years, most major retirement savings limits will still rise, giving many taxpayers especially business owners and higher-earning individuals — additional opportunities to strengthen their long-term savings strategy.

Below is a snapshot of the updated limits for 2026:

2026 Retirement Plan Contribution Limits

Type of Limitation	2025 Limit	2026 Limit
Elective deferrals to 401(k), 403(b), and 457 plans	$23,500	$24,500
Annual benefit limit for defined benefit plans	$280,000	$290,000
Total contributions to defined contribution plans	$70,000	$72,000
SIMPLE contributions	$16,500	$17,000
Traditional and Roth IRA contributions	$7,000	$7,500
Catch-up contributions (age 50+) for 401(k), 403(b), and 457 plans*	$7,500	$8,000
Catch-up contributions (ages 60–63) for 401(k), 403(b), and 457 plans*	$11,250	$11,250
SIMPLE catch-up contributions (age 50+)	$3,500	$4,000
SIMPLE catch-up contributions (ages 60–63)	$5,250	$5,250
IRA catch-up contributions (age 50+)	$1,000	$1,100
Compensation limit for qualified plans and SEPs	$350,000	$360,000
Minimum compensation for SEP coverage	$750	$800
Highly compensated employee threshold	$160,000	$160,000

*Beginning in 2026, SECURE 2.0 requires catch-up contributions for higher-income taxpayers to be treated as Roth (after-tax) contributions. This generally applies to individuals with prior-year wages over $150,000. However, new final regulations give plans until December 31, 2026 to adopt the required amendments — meaning plans may continue to accept non-Roth catch-up contributions during 2026 without adverse consequences.

 

How MAGI Affects IRA Contribution Eligibility

Your modified adjusted gross income (MAGI) may limit your ability to contribute to — or deduct contributions from — traditional and Roth IRAs. The good news: all MAGI phaseout ranges will increase for 2026.

Traditional IRA Deduction Phaseouts (2026)

If you or your spouse participates in an employer-sponsored retirement plan, MAGI limits determine whether your traditional IRA contributions are deductible:

• Married filing jointly
  • For the spouse who participates in a workplace plan:
    $129,000 – $149,000 (up $3,000)
  • For the spouse who doesn’t participate:$242,000 – $252,000 (up $6,000)
• Single or head of household (participating in a workplace plan)
  • $81,000 – $91,000 (up $2,000)

Taxpayers within these ranges can deduct a partial traditional IRA contribution, while those above the range cannot deduct any contributions. However, even if your deduction is reduced or eliminated, you may still make nondeductible traditional IRA contributions. The $7,500 contribution limit for 2026 (plus a $1,100 catch-up contribution, if eligible, and reduced by any Roth IRA contributions) continues to apply.

Roth IRA MAGI Phaseouts (2026)

Employer plan participation does not affect Roth IRA eligibility, but MAGI limits do:

• Married filing jointly:
  $242,000 – $252,000 (up $6,000)
• Single or head of household:
  $153,000 – $168,000 (up $3,000)

If your MAGI falls within the phaseout range, you may make a partial contribution; above the range, Roth contributions are not allowed.

Note: Married couples filing separately are subject to significantly lower phaseout ranges.

Time to Revisit Your Retirement Strategy

The updated 2026 limits offer an excellent opportunity to reassess your retirement planning — especially with the upcoming SECURE 2.0 Roth catch-up requirement and rising IRA thresholds.

If you’d like help evaluating your current plan, maximizing your contributions, or considering tax-efficient strategies, our team is here to help.

 

© 2025

 

As the year winds down, it’s time to look for last-minute opportunities to trim your federal income tax bill. This year’s planning is especially important because the One Big Beautiful Bill Act (OBBBA) introduces sweeping tax law changes that could significantly impact your 2025 return. Here are four key strategies to consider before December 31.

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Strategy #1. Reevaluate the Standard Deduction

Taxpayers can either itemize deductions or claim the standard deduction, whichever provides the greater tax benefit. The OBBBA increases standard deductions for 2025 as follows:

• $15,750 for single filers and married individuals filing separately
• $23,625 for heads of household
• $31,500 for married couples filing jointly

Taxpayers age 65 or older – or blind – can claim an additional deduction of $2,000 per person ($1,600 per spouse if filing jointly).

However, other OBBBA provisions may make itemizing worthwhile again. For example, the expanded state and local tax (SALT) deduction could push your itemized total above the standard deduction threshold (see Strategy #2 below). If so, you might benefit by accelerating deductible expenses into 2025, such as:

• Qualified medical and dental expenses exceeding 7.5% of adjusted gross income (AGI)
• Home mortgage interest (generally on up to $750,000 of eligible debt)
• Casualty losses from federally declared disasters
• Charitable contributions (see Strategy #3 below)

If you’re in the top tax bracket (37%), note that beginning in 2026, the value of itemized deductions will be capped at 35 cents per dollar. Consider accelerating itemized deductions into 2025 while the full benefit still applies.

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Strategy #2. Maximize the Expanded SALT Deduction

The OBBBA temporarily quadruples the SALT deduction cap to $40,000 ($20,000 for separate filers) from 2025 through 2029, with 1% annual increases. This deduction covers property taxes (on homes, vehicles, and boats) and either income or sales taxes, but not both.

Starting in 2030, the cap reverts to $10,000 ($5,000 for separate filers).

There are income phaseouts: the allowable deduction is reduced by 30% of the amount your modified adjusted gross income (MAGI) exceeds $500,000 ($250,000 for separate filers). Once MAGI reaches $600,000 ($300,000 for separate filers), the $10,000 cap applies again.

Tip: If your 2025 SALT expenses exceed $10,000 but you’d still fall below the standard deduction, consider “bunching” expenses. For instance, if you receive your 2026 property tax bill before year-end, pay it in 2025 to deduct both years’ taxes. Similarly, you could prepay estimated state or local income taxes (if applicable).

In 2026, return to taking the standard deduction, then bunch again in 2027.

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Strategy #3. Plan Ahead for Charitable Giving Changes

Charitable donations remain one of the most flexible tax-saving tools, but the rules are changing. Beginning in 2026, the OBBBA imposes a 0.5% of AGI “floor” on charitable deductions. That means only donations above 0.5% of your AGI will be deductible. For example, if your AGI is $100,000, the first $500 of contributions won’t be deductible.

To maximize the current rules:

• Consider “bunching” your 2026 donations into 2025 to avoid the new floor.
• Donate appreciated stock instead of cash to avoid capital gains tax and still deduct the stock’s fair market value.

If you don’t itemize, you may prefer to delay donations until 2026, when a new permanent non-itemizer deduction begins: up to $1,000 for individuals and $2,000 for married couples filing jointly. Note that this applies only to cash contributions to public charities (not private foundations or donor-advised funds).

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Strategy #4. Manage Your Modified Adjusted Gross Income (MAGI)

MAGI determines eligibility and phaseouts for many tax benefits, including several new ones under the OBBBA.

For example, taxpayers age 65 or older can claim a new temporary “senior deduction” of $6,000, on top of the standard or itemized deduction. However, this begins to phase out at MAGI above $75,000 ($150,000 for joint filers).

Other provisions – such as the enhanced SALT deduction, the Child Tax Credit, and new temporary deductions for qualified tips, overtime pay, and car loan interest – are also tied to MAGI limits.

To reduce your MAGI, you might:

• Spread Roth IRA conversions over multiple years
• Maximize contributions to traditional retirement plans and Health Savings Accounts (HSAs)
• If age 70½ or older, make qualified charitable distributions (QCDs) directly from your IRA, which count toward your required minimum distribution but are excluded from MAGI

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Don’t Wait to Plan

Year-end tax planning can have a big impact, especially under the new OBBBA rules. The best strategies depend on your income, deductions, and personal goals.

At Slattery & Holman, P.C., we can help you identify and implement year-end opportunities to reduce your 2025 tax bill.

Contact us today to schedule a personalized planning session.

 

© 2025

Quick Takeaways

• The SALT deduction cap temporarily increases to $40,000 in 2025 ($20,000 for married filing separately) before returning to $10,000 in 2030.
• High-income taxpayers may see their deduction reduced if income falls between $500,000–$600,000 MAGI (the “SALT torpedo”).
• Strategic moves like boosting retirement contributions can help reduce MAGI and preserve deductions.
• Pass-through business owners should review PTET elections, which may still provide benefits under OBBBA.

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Background on the SALT Deduction

Less than a decade ago, eligible state and local tax (SALT) expenses were generally 100% deductible if a taxpayer itemized. This was especially valuable in states with higher income or property taxes.

The Tax Cuts and Jobs Act (TCJA) of 2018 changed that by imposing a $10,000 deduction cap ($5,000 for married filing separately), scheduled to expire after 2025.

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What’s Changing Under the OBBBA?

The One Big Beautiful Bill Act (OBBBA) modifies SALT deductions starting in 2025:

• Cap increases to $40,000 ($20,000 if married filing separately).
• The cap increases by 1% annually through 2029.
• In 2030, the cap reverts back to $10,000.
• Deductions are reduced once MAGI exceeds $500,000 (halved for separate filers), with a 30% reduction of the excess over the threshold.

Baseline savings example (no phaseout): A single taxpayer in the 35% bracket with $40,000 of SALT expenses and MAGI under $500,000 would save an additional $10,500 in 2025 compared with the prior $10,000 cap. [35% x ($40,000 – $10,000)]

Phaseout mechanics example (2025): If MAGI is $560,000—that’s $60,000 over the threshold—the SALT cap is reduced by 30% × $60,000 = $18,000. The allowable SALT deduction becomes $22,000 ($40,000 − $18,000), which is still more than twice the old $10,000 cap.

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The “SALT Torpedo” Explained

When MAGI moves from $500,000 toward $600,000, you don’t just add income—you also lose SALT deduction due to the phaseout. This combination can cause a sharp increase in effective marginal tax rate, sometimes called the “SALT torpedo.”

Illustrative example (2025): MAGI rises from $500,000 to $600,000, SALT expenses are $40,000, and other itemized deductions are $35,000.

SALT torpedo impact as MAGI increases

	MAGI $500,000	MAGI $600,000
SALT deduction	$40,000	$10,000
Other itemized deductions	$35,000	$35,000
Total itemized deductions	$75,000	$45,000
Taxable income (illustrative)	$425,000	$555,000

The $100,000 rise in MAGI increases taxable income by $130,000 because you also lose $30,000 of SALT deduction (from $40,000 to $10,000). At a 35% marginal rate, that’s $45,500 of additional tax—an effective 45.5% marginal rate on that $100,000 increase.

Even with SALT reduced to $10,000, you may still benefit from itemizing if your total itemized deductions exceed your standard deduction; otherwise, the standard deduction will produce a lower tax.

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Tax Planning Strategies to Consider

Taxpayers can manage their Modified Adjusted Gross Income (MAGI) to maximize SALT deductions:

• Boost pre-tax 401(k) or HSA contributions.
• If self-employed, use retirement plans that allow larger deductible contributions.
• Avoid moves that increase MAGI, such as Roth IRA conversions, unnecessary asset sales, or large mutual fund distributions.
• Consider pre-paying property taxes (if already assessed) in years when your MAGI is below thresholds.

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Pass-Through Entity Tax (PTET) Considerations

Many states enacted PTET elections after the TCJA to help business owners bypass the SALT cap. The OBBBA keeps these workarounds intact, though some state PTET laws may expire after 2025.

Business owners should review their state’s rules annually to see if PTET elections remain advantageous.

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SALT Deduction and the Alternative Minimum Tax (AMT)

SALT expenses are not deductible under the AMT. The OBBBA makes TCJA’s higher AMT exemptions permanent but tightens phaseout rules for joint filers after 2026.

High-income taxpayers with large SALT deductions should run projections to avoid being caught by the AMT.

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What This Means for You

The OBBBA’s SALT deduction changes offer opportunities for tax savings but also introduce new risks, especially for high-income earners. Planning ahead can make the difference between maximizing deductions and getting caught in the “SALT torpedo.”

Our CPA team can help you:

• Evaluate whether itemizing or the standard deduction will save you more.
• Plan retirement and compensation strategies to reduce MAGI.
• Review PTET elections for pass-through businesses.
• Project your AMT exposure and create a tax-efficient strategy.

 

Updated for 2025 tax year – © 2025

Starting September 30, 2025, the federal government will eliminate paper checks for most tax refunds and benefit payments. The IRS, U.S. Treasury Department, and Social Security Administration (SSA) are moving to an all-electronic payment system in an effort to reduce fraud, speed up transactions, and cut administrative costs.

This shift will affect millions of taxpayers, including those who are unbanked or living abroad. Now is the time to prepare.

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Why Is the IRS Ending Paper Checks?

Many Americans still receive paper checks for IRS tax refunds, Social Security benefits, and other federal payments. Under an executive order signed by President Trump, this option will no longer be available after September 30, 2025.

According to the order, paper checks are 16 times more likely to be lost, stolen, or altered than direct deposit payments. Transitioning to electronic payments helps:

• Prevent identity theft and check fraud
• Speed up processing time
• Save taxpayer dollars

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What If You Don’t Have a Bank Account?

Roughly 6 million U.S. households remain “unbanked”, meaning they don’t have a checking or savings account. This creates a challenge for the transition.

To address this, the federal government may:

• Issue tax refunds on prepaid debit cards
• Encourage banks and credit unions to offer low-fee or no-fee accounts
• Promote the Direct Express® card for federal benefit recipients

If you’re unbanked, it’s wise to open a U.S.-based account soon to avoid refund delays in the 2025 tax season.

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3 Key Changes Taxpayers Should Expect

Here’s how this change may affect you:

1. Bank account required: You must have a U.S. bank or credit union account to receive tax refunds and federal benefits.
2. Faster refunds: Direct deposit eliminates mail delays, so you’ll likely receive your refund more quickly.
3. Lower fraud risk: Electronic payments are more secure than paper checks.

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Special Concerns for U.S. Citizens Abroad

If you live overseas, take note: foreign bank accounts generally won’t work for IRS direct deposit.

This presents a challenge for expatriates. The government may offer limited exceptions or partner with services that offer U.S.-based banking solutions. Expats should:

• Consider opening a U.S. account now
• Follow IRS updates on refund delivery options for non-residents

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Estate and Trust Filings: An Overlooked Issue

The American Institute of CPAs (AICPA) has raised concerns for estate executors and trustees. Current IRS forms don’t allow for electronic refund details when dealing with estates or trusts, and mismatches in taxpayer names vs. account names can block refunds.

Professionals and fiduciaries should monitor guidance from the IRS and plan accordingly.

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Social Security Payments

The SSA reports that less than 1% of beneficiaries still receive paper checks. If you’re one of them, you can:

• Enroll in direct deposit using your bank or credit union
• Sign up for the Direct Express® debit card to receive your benefits

Visit ssa.gov for instructions.

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What Taxpayers Should Do Now

To avoid disruption, all taxpayers should:

• Open a U.S.-based bank account (if you don’t have one)
• Update your direct deposit info with the IRS or SSA
• Watch for future guidance from the IRS
• Contact your tax professional with questions

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Questions About the IRS Refund Process?

At Slattery & Holman, we help clients stay ahead of tax law changes that impact refunds, benefits, and planning. If you’re unsure how the paper check phaseout will affect you or your loved ones, reach out to our team for guidance.

Contact us today to ensure you’re prepared before the 2025 deadline.

 

© 2025

For months, Republican lawmakers and former President Trump have voiced opposition to clean energy tax benefits introduced under the Inflation Reduction Act (IRA). With the recent passage of the One, Big, Beautiful Bill Act (OBBBA), several of those incentives are being repealed or significantly reduced.

Here’s a breakdown of the clean energy tax credits affected by the OBBBA — and what individuals and businesses need to know before they expire.

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Clean Energy Tax Credits for Individuals

Several tax credits aimed at homeowners and consumers will sunset earlier than expected. However, the OBBBA provides short grace periods, offering a limited window for action.

Energy Efficient Home Improvement Credit (IRC Sec. 25C)

• Old expiration: 2032
• New expiration: December 31, 2025
• What it covers: 30% credit for improvements like energy-efficient windows, doors, insulation, and home energy audits.

Residential Clean Energy Credit (IRC Sec. 25D)

• Old expiration: 2034
• New expiration: December 31, 2025
• Applies to: Solar panels, geothermal systems, wind, biomass, and other clean energy installations.

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Clean Energy Tax Incentives for Businesses

Several business credits have also been shortened or eliminated, especially those related to commercial property and clean manufacturing.

Alternative Fuel Vehicle Refueling Property Credit (IRC Sec. 30C)

• Old expiration: 2032
• New deadline: Property must be placed in service by June 30, 2026
• Credit: Up to $100,000 per item (charging port, storage tank, etc.)

Energy Efficient Commercial Building Deduction (IRC Sec. 179D)

• Eliminated for: Projects that begin construction after June 30, 2026
• Note: This deduction was significantly enhanced under the IRA before being repealed.

Wind and Solar Incentives (IRC Secs. 48E, 45Y)

• Eliminated: Clean Electricity Investment & Production Credits
• Cutoff: Facilities placed in service after 2027 unless construction begins before July 4, 2026

Advanced Manufacturing Production Credit (IRC Sec. 45X)

• Wind energy components ineligible after 2027
• New rule: Adds metallurgical coal to eligible materials
• Phaseout for others: From 2031 to 2033
• Metallurgical coal credit ends after 2029

Note: You can still transfer clean energy tax credits before they expire, though restrictions apply for transfers involving “specified foreign entities.”

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Clean Vehicle Tax Credits — Ending Soon

Thinking about buying an electric vehicle? You’ll want to act fast. Several consumer and business EV incentives will expire much earlier than expected under the OBBBA.

Clean Vehicle Credit (IRC Sec. 30D)

• Old expiration: 2032
• Now ends: September 30, 2025
• Credit: Up to $7,500 for new EVs meeting mineral and battery sourcing rules

Used Clean Vehicle Credit (IRC Sec. 25E)

• Ends: September 30, 2025
• Credit: Lesser of $4,000 or 30% of sale price for qualifying used EVs

Commercial Clean Vehicle Credit (IRC Sec. 45W)

• Now limited to: Vehicles acquired before September 30, 2025
• Credit: Up to $7,500 (light vehicles) or $40,000 (heavy vehicles)

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Other Limitations: Foreign Entities and Domestic Content Rules

The OBBBA also tightens the rules on remaining clean energy incentives by:

• Prohibiting credits tied to “foreign entities of concern”
• Imposing stricter domestic content requirements

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Don’t Wait Until It’s Too Late

Whether you’re a homeowner considering solar panels, a business upgrading commercial property, or a taxpayer looking to purchase an EV, now’s the time to act. With shortened expiration dates and increased restrictions, proper planning is more critical than ever.

Need help navigating these changes? Our tax professionals can help you make informed, strategic decisions.

Contact us today to explore how these expiring clean energy credits affect you.

 

© 2025

The One, Big, Beautiful Bill Act (OBBBA) brings significant updates to the tax landscape for individuals. From expanded deductions and new credits to permanent provisions from the Tax Cuts and Jobs Act (TCJA), understanding these changes is crucial for year-end planning and beyond.

Let’s walk through the most notable changes and what they mean for your tax strategy in 2025 and beyond.

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State and Local Tax (SALT) Deduction

Starting in 2025, the SALT deduction cap increases to $40,000 for joint filers and $20,000 for married filing separately — with a 1% increase each year through 2029. In 2030, the original $10,000 cap returns.

High-income taxpayers with MAGI above $500,000 ($250,000 if married filing separately) will see a reduction in their SALT cap. To maximize your deduction, consider strategies to reduce MAGI, like increasing retirement contributions or making qualified charitable distributions from IRAs.

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Child Tax Credit (CTC) & Credit for Other Dependents (COD)

The Child Tax Credit is now permanently set at $2,200 per child, starting in 2025, with annual inflation adjustments. Additionally:

• The $1,400 refundable portion is made permanent (increased to $1,700 in 2025).
• The $500 COD for non-qualifying dependents is also permanent.
• Income phaseouts remain at $400,000 for joint filers and $200,000 for others.

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Education-Related Tax Breaks

OBBBA expands the scope of 529 plans:

• Tax-free distributions can now be used for credentialing programs and a wider range of K–12 expenses (books, tutoring, materials, testing fees).
• The annual K–12 distribution cap doubles from $10,000 to $20,000 in 2026.

A new tax credit of up to $1,700 is available for contributions to scholarship organizations for K–12 students in households earning up to 300% of the area median income.

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Student Loan Benefits

Employer-paid student loan repayment remains excluded from income (up to $5,250/year), with inflation adjustments starting in 2026.

However, from 2026 on, only forgiven loans due to death or permanent disability will qualify for tax-free treatment. Other forgiven student loans will be taxable — unless Congress extends current relief. Be aware: some states may tax forgiven debt, even if federally excluded.

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Charitable Contribution Deductions

Starting in 2026:

• A new nonitemized charitable deduction of up to $1,000 ($2,000 for joint filers) is available.
• A 0.5% AGI floor will apply to itemized charitable deductions. For example, with $100,000 AGI, only donations above $500 will be deductible.

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Qualified Small Business Stock (QSBS)

OBBBA introduces partial exclusions for shorter QSBS holding periods:

• 75% exclusion for 4-year holdings
• 50% exclusion for 3-year holdings

The asset cap for QSBS eligibility also increases to $75 million, adjusted for inflation. These changes apply to stock acquired after July 4, 2025.

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Premium Tax Credit (PTC) Changes

Beginning in 2026, if you receive excess PTCs, you’ll need to repay the full amount unless your actual income is under 100% of the poverty level.

From 2028 on, recipients must annually verify eligibility factors like income, immigration status, and residence — automatic re-enrollment ends.

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Temporary Deductions for 2025–2028

These apply whether you itemize or not:

Tips Deduction

Deduct up to $25,000 in reported tips if you work in an occupation with customary tipping. Starts phasing out at $150,000 MAGI ($300,000 joint).

Overtime Pay Deduction

Deduct the “overtime premium” (extra pay beyond regular rate) up to $12,500 or $25,000 for joint filers. Phaseouts match the tips deduction.

Auto Loan Interest Deduction

Deduct up to $10,000 of interest on new vehicle loans (U.S.-assembled, under 14,000 lbs., post-2024 loans). Begins phasing out at $100,000 MAGI ($200,000 joint).

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“Senior” Deduction

Taxpayers age 65+ can deduct $6,000 starting in 2025. This is independent of whether they receive Social Security. The deduction begins to phase out at $75,000 MAGI ($150,000 joint).

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Trump Accounts for Children

Launching in 2026, Trump Accounts are savings accounts for children under 18 with Social Security numbers.

• Annual contribution limit: $5,000 per child
• Initial $1,000 federal contribution available for U.S.-born citizens (2025–2028)
• Funds grow tax-deferred, and accounts must remain invested in approved index funds
• Withdrawals permitted after age 18

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Permanent TCJA Provisions Made Law

The OBBBA makes permanent many key Tax Cuts and Jobs Act (TCJA) measures:

• Individual tax rates of 10%, 12%, 22%, 24%, 32%, 35%, 37%
• Increased standard deduction
• Repeal of personal exemptions
• Limit on SALT deduction
• AMT exemption increases
• Mortgage interest deduction cap at $750,000
• Deductibility of mortgage insurance premiums resumes after 2025
• Repeal of home equity loan interest unless used for home improvement
• Casualty loss deduction limited to federally and certain state-declared disasters
• Elimination of miscellaneous itemized deductions
• Elimination of moving expense deduction (with narrow exceptions)

While labeled “permanent,” Congress could still amend these provisions in the future.

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Time to Reassess Your Tax Strategy

These updates — plus other changes like limits on itemized deductions for high earners and gambling loss restrictions — make it more important than ever to review your personal tax plan.

Whether you’re a wage earner, investor, retiree, or parent, we can help you adjust your strategy and take full advantage of the new provisions under OBBBA.

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Let’s Talk Tax Strategy

Want to know how OBBBA will impact your 2025 return?
Our team is here to help you navigate the changes and uncover opportunities. Contact us today to schedule your personalized tax planning session.

 

© 2025

With its broad overhaul of the tax code, the newly passed One, Big, Beautiful Bill Act (OBBBA) introduces a mix of changes for businesses. While a few prior incentives are scaled back, many provisions open the door to new planning advantages—particularly for those in manufacturing, small business ownership, and real estate. Strategic planning will be key to navigating the new rules and maximizing potential benefits.

Below, we highlight key areas of the law that may affect your 2025 tax planning and beyond.

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Qualified Business Income (QBI) Deduction

Section 199A is here to stay. The OBBBA makes the QBI deduction for pass-through businesses and sole proprietors permanent.

• Expands the phase-in thresholds to $75,000 (single) and $150,000 (joint)
• Adds a minimum $400 QBI deduction starting in 2025 (indexed for inflation)
• Applies to taxpayers with at least $1,000 of QBI from active businesses in which they materially participate

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100% Bonus Depreciation Made Permanent

Businesses can now permanently deduct 100% of qualified property placed into service after January 19, 2025. That includes used assets.

• Qualified production property placed in service between July 4, 2025, and 2031 also qualifies
• Section 179 limits raised to $2.5 million with a $4 million phaseout threshold (indexed annually)

This is a major incentive for capital investment and equipment purchases.

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Research & Experimentation (R&E) Expenses

Starting in 2025, businesses may again deduct domestic R&E costs in the year incurred.

• Reverses the TCJA amortization rule
• Applies retroactively (2022–2024) for small businesses (avg. receipts < $31 million)
• Accelerated deductions over one or two years available for prior expenses

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Rollbacks to Clean Energy Incentives

The OBBBA repeals or accelerates the expiration of several business clean energy credits:

• Commercial clean vehicle credit ends after Sept. 30, 2025
• Alternative fuel vehicle refueling property credit ends after June 30, 2026
• Sec. 179D deduction for energy-efficient buildings is eliminated

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Qualified Opportunity Zones (QOZs)

OBBBA makes the QOZ program permanent and enhances investor benefits:

• Step-up in basis now begins after year 1
• Initial gains must be realized in year 7
• New rural-focused QOFs receive triple step-up in basis

First round of new QOFs launches January 1, 2027.

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International Tax Changes

Key international provisions from the TCJA are now permanent:

• FDII and GILTI deductions stay, now taxed at an effective rate of 14%
• BEAT minimum tax raised to 10.5% starting in 2026

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Employer Tax Incentives

Several employee-related credits and exclusions are now permanent:

• Student loan payment exclusion: Adjusted annually after 2026
• Child care credit: 40% for large businesses, 50% for small, up to $500K–$600K annually
• Paid FML credit: Permanently extended to include premiums for FML insurance

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Employee Retention Tax Credit (ERTC)

Important update for late filers:

• No refunds will be issued for ERTC claims filed after January 31, 2024
• The IRS now has 6 years to examine and challenge these claims

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Other Notable Provisions

• Business interest deduction: Expanded by excluding depreciation, amortization, and depletion from ATI
• Excess business loss limitation: Made permanent
• New Markets Tax Credit: Permanently extended

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How Will the OBBBA Affect Your Business?

The OBBBA delivers long-term clarity to several areas of business tax planning. While the law doesn’t create major structural overhauls, the permanence of many popular incentives provides planning opportunities for years to come.

Ready to plan ahead? Contact our team today to discuss how these changes impact your specific situation. We’re here to help you navigate the road ahead.

 

© 2025

On July 4, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law — an 870-page piece of legislation with major implications for individuals and businesses alike. This landmark bill builds on the 2017 Tax Cuts and Jobs Act (TCJA), making many of its provisions permanent, while introducing a wave of new deductions and adjustments — some temporary, others long-term.

Below is a summary of the most impactful provisions, effective for tax years beginning in 2025, unless otherwise noted.

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Key Tax Changes for Individuals

Income Tax & Standard Deduction

• Permanently retains TCJA tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37%
• Permanently increases the standard deduction, with annual inflation adjustments:
  • $15,750 for single filers
  • $23,625 for heads of households
  • $31,500 for joint filers
• Personal exemptions permanently eliminated

Family & Child Benefits

• Child Tax Credit increased to $2,200, with inflation indexing
• Adoption Tax Credit becomes partially refundable up to $5,000 (no carryforwards)
• “Trump Accounts”: Eligible newborns receive $1,000 seed funding (beginning in 2026)

Temporary Deductions (2025–2028)

• Tip income deduction: Above-the-line deduction up to $25,000 for qualifying industries (with income-based phaseouts)
• Overtime pay deduction: Up to $12,500 (single) or $25,000 (joint)
• American-made vehicle loan interest: Up to $10,000 deductible
• Senior bonus deduction: Up to $6,000 for taxpayers age 65+, with phaseouts

Housing & Mortgage

• Mortgage interest deduction capped at $750,000 of debt (includes mortgage insurance premiums)
• Home equity loan interest deduction eliminated
• Personal casualty loss deduction limited to federally or certain state-declared disasters

Other Itemized & Above-the-Line Changes

• SALT cap raised: Temporarily increases to $40,000 in 2025, growing 1% per year through 2029, then returns to $10,000
• Miscellaneous itemized deductions eliminated, except for unreimbursed educator expenses
• Moving expense deduction eliminated, except for active-duty military
• Clean energy tax incentives eliminated, including:
  • Clean vehicle credits
  • Residential clean energy and energy efficiency credits
• Charitable contributions:
  • Above-the-line deduction for non-itemizers: $1,000 (single) / $2,000 (joint)
  • New 0.5% floor on itemized charitable deductions (starting in 2026)

Education & Estate Planning

• Section 529 plans expanded to cover additional qualified expenses
• Federal gift and estate tax exemption increased to $15M (individual) / $30M (joint) beginning in 2026, with annual inflation adjustments
• Alternative Minimum Tax (AMT) exemption levels permanently increased

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Key Tax Changes for Businesses

Deductions & Depreciation

• Qualified Business Income (QBI) deduction for pass-through entities (20%) made permanent and expanded
• 100% bonus depreciation made permanent for new and used assets acquired after Jan. 19, 2025
• Sec. 179 expensing limit raised to $2.5M, with $4M phaseout
• New deduction for “qualified production property” (100%) for property placed in service after July 4, 2025, and before 2031
• Cap on interest deductions eased by excluding depreciation, amortization, and depletion from “adjusted taxable income” (ATI) calculation
• Domestic R&D expenses permanently deductible for eligible small businesses (retroactive to 2022)
• Excess business loss limitation made permanent

Eliminations & Phaseouts

• Employee Retention Credit (ERC) refunds denied for claims filed after Jan. 31, 2024
• Clean energy tax incentives eliminated, including:
  • Commercial clean vehicle credit
  • Alternative fuel refueling property credit
  • Sec. 179D energy-efficient building deduction

Incentives & Credits

• Qualified Opportunity Zone program made permanent
• New Markets Tax Credit permanently extended
• Employer-provided child care credit permanently increased to $500,000 ($600,000 for small businesses), with annual inflation adjustments
• Paid family & medical leave credit made permanent and modified
• Employer student loan payment exclusion made permanent, with inflation adjustments beginning in 2027

International & Investment Incentives

• Foreign-Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI) deductions made permanent
• Base Erosion and Anti-Abuse Tax (BEAT) made permanent
• Qualified small business stock exclusion expanded for new stock issuances

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What’s Next?

This summary highlights some of the major changes — but there are dozens of additional provisions, caveats, and phaseouts that could impact your 2025 tax strategy. Many of these changes will require new regulations and IRS guidance, and some may be subject to legal or political challenges.

Our team is closely monitoring developments and will help you navigate the new tax landscape.

Need help planning ahead? Contact us today to schedule a personalized tax strategy session.

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© 2025

The U.S. Senate has passed a major 2025 tax reform package known as the “One Big Beautiful Bill” (OBBB). If enacted, it would extend key provisions of the Tax Cuts and Jobs Act (TCJA), increase popular deductions, and introduce new tax breaks for working Americans and seniors. Here’s what’s inside and how it could impact individuals and businesses.

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Senate Passage and Legislative Background

The U.S. Senate passed its version of the One Big Beautiful Bill on July 1 by a narrow vote of 51 to 50, with Vice President J.D. Vance casting the tiebreaker. The bill closely mirrors the version passed by the U.S. House of Representatives in May and is now back in the House for final consideration.

At its core, the legislation includes extensions of key TCJA provisions currently set to expire on December 31, 2025, along with several new and enhanced tax breaks.

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New Tax Breaks for Individuals

Both the House and Senate bills align with campaign promises from President Trump to reduce the tax burden on workers:

• Tip and Overtime Income Exemption: Certain tips and overtime pay would be exempt from income tax for eligible taxpayers. Specific eligibility criteria will be defined if the bill becomes law.
• Senior Deduction for Social Security Recipients: While full elimination of tax on Social Security benefits did not make it into either version of the bill, the Senate version includes a $6,000 deduction for those age 65 and older from 2025 through 2028, for taxpayers with modified adjusted gross income (MAGI) under $75,000 ($150,000 for married couples filing jointly). The House version proposes a similar deduction, but caps it at $4,000.

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SALT Deduction Cap Changes in 2025 Tax Bill

A long-standing point of contention, the state and local tax (SALT) deduction cap, remains a major focus of the bill:

• Current law: Limits SALT deductions to $10,000, as enacted by the TCJA.
• Senate Proposal:
  • Increases the cap to $40,000 for 2025
  • Adds a 1% annual increase through 2029
  • Reverts back to $10,000 in 2030
  • Phases out the deduction for individuals earning over $500,000 in 2025, with the income threshold increasing 1% annually through 2029
• House Proposal: Also increases the cap to $40,000, but proposes to make the change permanent for those earning under $500,000.

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Child Tax Credit (CTC) Updates Under the Senate Bill

The current Child Tax Credit of $2,000 per child is set to drop to $1,000 after 2025, and key eligibility requirements would loosen unless Congress acts.

Both bills aim to enhance and extend the CTC, with differences in structure:

• Senate Version:
  • Makes the CTC permanent
  • Increases it to $2,200 per child, indexed for inflation
  • Requires Social Security Numbers (SSNs) for both the child and the parent claiming the credit
• House Version:
  • Increases CTC to $2,500 per child for 2025–2028
  • Retains the higher income phaseout thresholds
  • Requires SSNs for both the child and the taxpayer
  • Reverts to $2,000 per child after 2028, with annual inflation adjustments

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What’s Next?

The proposed legislation is now back in the House of Representatives for further debate and a final vote. President Trump has expressed urgency in getting the bill signed into law by July 4, though it remains uncertain whether the House will meet that timeline.

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What This Means for You

This bill includes significant potential changes for taxpayers, including increased deductions, credits, and special provisions for seniors and workers. While not yet law, it could have a major impact on your 2025 tax planning and beyond.

Our team is closely tracking the bill’s progress. Contact our office if you have questions or want to prepare for possible changes that may affect your tax return.

© 2025