Recent legislative developments have introduced a range of permanent and transitional changes to the U.S. tax code, affecting individuals, businesses, and investors alike. These changes span income tax rates, deductions, business incentives, and reporting requirements. Understanding the implications of these updates and taking timely action is critical to maximizing benefits and maintaining compliance.
Key Bill Changes: Summarized
Some of the most significant changes include:
- Individual Tax Provisions (full list)
- Permanent lower tax rates and brackets: The tax rates enacted in 2017 under the TCJA are made permanent, with inflation adjustments added to the 12% and 22% brackets.
- Standard deduction: The nearly doubled standard deduction is permanent — $15,750 for single filers, $23,625 for head of household, and $31,500 for married filing jointly (all indexed for inflation).
- Child tax credit: Increases to $2,200 per child beginning in 2025, indexed for inflation.
- Estate and gift tax exemption: Raised to $15 million per individual ($30 million for married couples) in 2026, indexed for inflation.
- SALT deduction cap: Increased to $40,000 per household, phased out for MAGI over $500,000, reverting to $10,000 in 2030.
- Charitable deductions, tips, overtime, and senior enhancements: Includes above-the-line charitable deductions, tax-free tips and overtime (2025–2028), and enhanced deductions for seniors.
- Business Tax Provisions (full list)
- QBI deduction: Permanent 20% deduction for qualified business income.
- Bonus depreciation: 100% expensing for property placed in service after Jan. 19, 2025.
- Sec. 179 expensing: Maximum increased to $2.5 million, with a phaseout of $4 million.
- Research and experimental expenditures: Immediate deduction allowed for domestic R&E expenses in 2025; foreign R&E must still be amortized over 15 years.
- Excess business loss limitation: Made permanent.
- Business interest deduction, FDII/GILTI, BEAT, and 1099 reporting: Includes EBITDA-based calculation for business interest, reduced deduction percentages for FDII and GILTI, increased BEAT rate, and updated thresholds for third-party reporting.
- Opportunity Zones and clean energy credits: Opportunity Zones made permanent with some refinements; select clean energy credits from the IRA are terminated.
How Can You Prepare?
A phased approach to planning will align with the timing and impact of this legislative development. This approach allows us to support you with timely strategies tailored to each stage of implementation:
- Short-term planning will focus on immediate actions and compliance considerations for tax provisions already in effect or taking effect soon.
- Mid-term planning will address transitional provisions and opportunities that emerge over the next 12–18 months.
- Long-term planning will help position you for sustained success by anticipating future changes and aligning your financial goals with the broader tax policy environment.
We’ll continue to monitor developments closely and provide updates and guidance as new details become available. Our goal is to ensure you’re informed, prepared, and supported — every step of the way.
