By now, you’ve probably heard about the new federal tax law with the hard-to-forget name, the One Big Beautiful Bill Act. Signed into law on July 4, 2025, it packs a lot of changes, many of which could affect your personal and business taxes starting as early as 2025.

We’ve boiled it down to the key points that matter most for individuals and small business owners like you. As always, we’re here to help you navigate these changes with confidence (and hopefully a little less stress come tax time).

Personal Tax Updates

Lower Tax Rates Made Permanent: The tax brackets and lower rates introduced back in 2017 are now permanent. A bit of inflation wiggle room has been added to the 12% and 22% brackets too.

Standard Deduction – Still Big, Still Here: Starting in 2025, the standard deduction is here to stay and has been adjusted for inflation:

• Single/MFS: $15,750
• Head of Household: $23,625
• Married Filing Jointly: $31,500

Child Tax Credit Gets a Boost: Beginning in 2025, the child tax credit bumps up to $2,200 per child and will adjust with inflation. More help for families? Yes, please.

Estate & Gift Exemption Increases (Big Time): Starting in 2026, the estate and gift tax exemption rises to $15 million per person ($30 million for couples). Not everyone needs to worry about this, but if you’re getting close, we should definitely talk.

SALT Deduction Cap Changes: The cap on your state and local tax (SALT) deduction increases to $40,000 per household but begins to phase out once income hits $500,000. It drops back to $10,000 in 2030. Enjoy it while it lasts!

Charitable Giving for Non-Itemizers: Starting in 2026, you can deduct charitable gifts even if you don’t itemize, up to $1,000 for individuals and $2,000 for joint filers. A nice win for generous hearts.

Tips & Overtime Deductible (Yes, Really!): From 2025 to 2028, certain tips and overtime income may be deductible. The rules are a bit tricky, so we’ll help you figure it out if this applies to you.

Seniors, There’s a Bonus Deduction for You: If you’re 65 or older, and have income below $75,000 ($150,000 for joint filers), you may qualify for an extra $6,000 deduction from 2025 to 2028.

Car Loan Interest Deduction (With a Catch): You can deduct up to $10,000 per year in interest if you finance a new U.S.-assembled car between 2025 and 2028 (subject to income limits). Used and leased vehicles are not eligible.

Tax Credits That Sunset This Year: If you want to buy an electric vehicle and get that tax credit we’ve had for a few years, you better make your purchase before 9/30/25. The residential energy credit (think heat pumps & solar panels) expires on 12/31/25.

Moving Expense Deduction Gone (Still): This one’s been gone for most taxpayers for years, and now it’s officially permanent (unless you’re in the Armed Forces).

Home Mortgage & Insurance Deductions Stick Around: The $750,000 mortgage cap and deduction for mortgage insurance are now permanent. Same goes for the rule excluding home equity loans from the definition of “qualified residence interest.”

Disaster Losses Broadened: You can still deduct casualty losses, and now state-declared disasters qualify too. Fingers crossed you never need this.

Other Permanent Perks: The adoption credit, education deductions, employer childcare credits, and paid leave credits have all been made permanent. So, if you’re adopting, learning, caring, or just need time off, you’re covered.

Small Business Tax Updates

QBI Deduction – Still 20% & Now Permanent: The 20% deduction for qualified business income is sticking around for good. That’s a big one for many of you.

Bonus Depreciation is Back at 100%: Starting January 19, 2025, you can fully expense qualifying business property again. Great news for anyone planning equipment purchases.

Section 179 Expensing Limit Goes Up: You can now deduct up to $2.5 million in eligible purchases, with phase-outs beginning at $4 million. These thresholds will rise with inflation after 2025.

R&D Expenses – Domestic Is King: If you invest in U.S.-based research, you can deduct those expenses right away in 2025. Overseas research? Still amortized.

Business Loss Limitation – Now Forever: The rules limiting how much loss you can deduct each year are now permanent, but carryforward rules remain unchanged.

Interest Expense Limitation Loosens Up: Good news – businesses can now use EBITDA (instead of EBIT) to calculate how much interest they can deduct. That’s usually a more generous formula.

1099-K Reporting Threshold Reverts to the Old Rules: Third-party payment platforms (like Venmo, PayPal, etc.) will only send a Form 1099-K if you’ve made more than 200 transactions and more than $20,000 in payments. No more surprise forms for selling used furniture online.

1099 Reporting Threshold for Services Rises: Starting in 2026, you’ll only need to issue a 1099 for services if you pay someone $2,000 or more. That’s up from the previous $600. Inflation adjustments begin in 2027.

Clean Energy Credits Rolled Back: Many of the energy credits from the Inflation Reduction Act are getting cut, so plan ahead if you’re making green upgrades.

How to Prepare

This isn’t a one-size-fits-all moment. Tax planning will be more important than ever. We recommend a three-phase approach:

• Short-term: Identify actions to take for 2025 and 2026. Especially if you plan on buying equipment, giving generously, or adjusting your business strategy.
• Mid-term: Get ready for provisions and opportunities kicking in over the next 12-18 months.
• Long-term: Let’s look at your estate, business structure, and future goals and make sure everything lines up with the new laws.

We’re Here to Help

Tax law doesn’t have to be intimidating. Our team is ready to walk you through what’s relevant to your situation, answer your questions, and help you plan with confidence. We expect to be busy helping our clients take advantage of these new tax laws, so give us a call or send us an email to schedule your tax planning session for this fall.