One big beautiful bill…

One big beautiful bill was signed into law July 2025 and the majority of taxpayers will benefit from lower taxes overall. Below you will see a few key provisions that are either permanent (permanent in tax means until changed) or temporary (from 2025 - 2028).

• Temporary provisions set to expire after 2028:

  • Seniors age 65 and older by end of tax year additional $6000 deduction (joint and both eligible $12000).

  • Child and dependent care credit kids under 13 is now 50% from the 35% beginning 2026, phaseout apply as income increases with a minimum 20% credit for highest earners.

  • Employer provided child care assistance was $5000 now $7500.

  • State and local tax deduction ( an itemized deduction) was capped at $10000 now its $40,000.

  • $25000 max deduction for tips reported on individual tax return, their are enhanced reporting requirements by employer. Available to non itemizers.

  • No tax on overtime, a max deduction of $12500 (joint $25000). W2s must separately report overtime. Available to non itemizers.

  • Personal car loan interest max deduction $10000 on cars with final assembly in the US, phasesouts apply based on income. Available to non itemizers.

  • Property mortgage insurance premiums deductible (itemized deduction)

  • Trump accounts - $1000 deposited into the account for a qualifying child born after 12.31.24 and before 01.01.29. Delayed implementation timeline, no withdrawals until beneficiary turns 18.

  • 529 plan distribution limit for k-12 expenses doubled to $20,000 and qualifying expenses to include industry recognized postsecondary credentials.

  • Adoption credit is partially refundable versus non refundable. $5000 is refundable, the rest is non refundable subject to carry forward.

  • Repeal of Energy credits for vehicles and home staggered over 2025 through June 30, 2026. Plan purchases before deadline.

• Permanent (until changed):

  • Enhanced standard deduction and elimination of personal exemptions.

  • Lower tax brackets compared to pre Taxcuts and jobs act.

  • Enhanced childtax credit $2200, refundable portion is $1700.

  • $1000 charitable deduction for non itemizers and $2000 for joint filers, effective 2026 tax year.

  • Educator expenses are allowed as misc. itemized deduction beginning 2026.

  • Estate and gift tax exemption Increased to $15,000,000.

  • Starting 2026 state declared disasters also includible as itemized deduction.

  • Moving expenses still only deductible for Armed Forces on active duty or orders but adds intelligence personnel. Reimbursements taxable for ordinary taxpayers, and excluded for armed forces and intelligence personnel. Beginning 2026.

  • Gambling losses could be taken up to the amount of winnings, now limited to 90% starting 2026.

  • Hazardous duty are designations that exclude income from combat zones, the areas that qualify are expanded to Sinai penninsual, Kenya, Mali, Burkina Faso, and Chad effective 2026.

  • Student loan forgiveness excluded from income for private and public loans even due to death or permanent disability. Effective for loans forgiven after 12/31/25.

  • Employer provided education benefits including payments for student loans and tuition assistance is now permanent effective 2026.

  • Limit on repayment of excess advanced premium tax credit (Obamacare) is repealed, the entire amount must be repaid beginning 2026. Stricter rules for qualifying for credit, must be enrolled based on change in life events.

  • HSA’s now allow the Bronze and Catastrophic health plans effective 2026. HSA’s for high deductible health plans are pretax health savings accounts that grow and are withdrawn tax free for qualified medical expenses.