Friends,
We want to share an important legislative update that may have a meaningful impact on your financial well-being. Recently, both the House and Senate passed The One Big Beautiful Bill (OBBB), which has now been signed into law by the President. This comprehensive bill includes a wide range of provisions, many of which affect the tax landscape. One of the most notable aspects is the permanent extension of several key elements from the Tax Cuts and Jobs Act of 2017.
Below are a few highlights we think are worth your attention.
- SALT: State and Local Tax Deduction
- The SALT deduction cap is increasing significantly—from $10,000 to $40,000 (this begins to phase out at $500,000 in adjusted gross income)
- After that, the cap will rise by 1% each year until 2029
- In 2029, the deduction cap will revert to $10,000
- Estate and Gift Tax Exemption
- The lifetime exemption for estate and gift taxes has been raised to $15 million per individual (or $30 million for married couples)
- If The Bill had not passed, the exemption would have reverted to pre-TCJA rules of $7 million for singles
- Bonus Depreciation
- The rule allowing businesses to deduct up to 100% of the acquisition cost of certain depreciable property in the year it’s acquired is now permanent.
- Tax Cuts & Miscellaneous
- The individual tax brackets from the Tax Cuts and Jobs Act (10%, 12%, 22%, 24%, 32%, 35%, and 37%) are now locked in permanently
- The Alternative Minimum Tax (AMT) exemption is now permanent for joint filers earning under $1 million
- Enhanced deductions for seniors: Taxpayers aged 65 and older can deduct up to $6,000 more from their taxable income through 2028. This begins phasing out at $75,000 for single filers and $150,000 for joint filers
- A new deduction allows taxpayers to deduct up to $10,000 for interest on certain auto loans on vehicles assembled in the U.S., available through 2028. This phases out starting at $100,000 for single filers and $200,000 for joint filers
There are many other provisions in the bill that may be relevant to your situation. If you’d like to discuss how these changes could affect you personally, please don’t hesitate to reach out.
Andrew