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This summary is for informational purposes only and does not constitute tax, legal, or financial advice. Financial Experts Network is not responsible for interpretations or outcomes based on this content. Provisions in the law remain subject to IRS guidance and may change. Readers should consult qualified professionals for personalized advice. Use of this summary releases Financial Experts Network from all liability.

🧾 Summary of Key Provisions in the Big Beautiful Tax Bill (2025)

1. Individual Income Tax Changes

• Brackets Made Permanent: Existing tax brackets are now permanent, though subject to congressional change.
• Standard Deduction Increase:
  • Married: $31,500
  • Single: $15,750
  • Additional $12,000 Senior Deduction for couples age 65+
    • Phases out from $150K–$250K AGI for married couples
• Child Tax Credit: Increased to $2,200 (partially refundable), with eligibility requiring a valid SSN.

2. Qualified Business Income (199A)

• Made Permanent: 20% deduction remains in place.
• Phaseout Expansion: Higher income thresholds but still affects SSTBs (e.g., lawyers, doctors).
• Effective Marginal Tax Rate Concern: Exceeding thresholds can trigger loss of the deduction, causing marginal tax rates to spike over 55%.

3. Itemized Deductions & SALT Cap

• SALT Deduction Increased: From $10,000 → $40,000 (2025–2028).
  • Phased out: 30% of AGI over $500K for joint filers.
• Pease Limitation Returns: Limits deductions once income hits 37% tax bracket.
• Planning Tip: Encourage deduction “bunching” or alternating itemization years for tax efficiency.

4. New Accounts & Exemptions

• Trump Accounts:
  • $5,000 annual contribution limit per child (ages 0–7 only).
  • Converts to a Roth-like IRA at age 18.
  • Employer contributions up to $2,500.
  • Federal government will provide a $1,000 starter credit for births between 2025–2028.
• ABLE Accounts:
  • Enhanced contribution limits.
  • Savers credit allowed.
  • Rollovers from 529 plans for disabled beneficiaries now permitted.

5. Charitable Deductions

• Above-the-line Deduction: $2,000 (married), starting in 2026.
• New Floor: Contributions must exceed 0.5% of AGI to qualify as itemized deduction.
• Corporate Giving: 1% floor introduced for deductibility.

💼 Business Provisions

6. Qualified Small Business Stock (QSBS)

• Exclusion increased to $15M (from $10M) if held 5+ years.
• New graduated exclusion structure (50% after 3 years, 75% after 4, 100% after 5).
• Key for business succession and startup planning.

7. Depreciation & Expensing

• Bonus Depreciation: 100% reinstated for qualifying assets.
• Section 179: Now allows expensing up to $2.5M, phased out at $4M.
• Qualified Production Property (QPP): Permits full expensing of real property used in U.S. manufacturing.

8. Tax Credits & Benefits

• Employer Childcare Credit: Up to $500,000 for facilities, $600,000 for small employers.
• Dependent Care Credit: Increased to 50%, phases down after $15K AGI.
• Student Loan Repayment: Employer-provided repayment assistance is permanently tax-free.

🚗 Cars, Tips, Overtime, and Other Changes

9. Car Loan Interest Deduction

• Up to $10,000, for U.S.-built new cars.
• Subject to AGI phaseouts starting at $200K.

10. Tipped Income

• Mandatory tips under $25K are deductible.
• Phaseout starts at $150K AGI.

11. Overtime Exemption

• Overtime wages (time-and-a-half under FLSA) are tax-exempt up to $25K.
• AGI phaseout begins at $150K (MFJ $300K).

🌾 Real Estate, OZs, and Farms

12. Opportunity Zones (OZ)

• New Rural OZs created:
  • 30% basis step-up for 5-year holding.
  • 100% gain exclusion after 10 years.
• Important Note: Dead period in 2025–2026 before new OZ rules apply in 2027.

13. Qualified Farmland Sale

• Gain from sale to a qualified farmer can be recognized evenly over four years (tax deferral).

✅ Fact-Checked Highlights & Resources

1. Full Text of BBB Tax Bill (Unofficial):
   Congress.gov (Search)
2. IRS Form 8995 (QBI Deduction):
   IRS Form 8995
3. IRS Form 1040 & Schedules:
   Form 1040
4. ABLE Accounts Overview:
   ablenrc.org
5. QSBS Tax Benefit Summary (Section 1202):
   Cornell Law - Section 1202
6. IRS Publication on SALT Deductions:
   Publication 505

📢 Advisor Action Items

• Adjust client financial plans to incorporate:
  • SALT strategy shifts
  • QSBS eligibility
  • Senior deduction phaseouts
  • Roth conversion timing
• Reassess entity choice (LLC vs. C-Corp) in light of enhanced QSBS and depreciation.
• Educate clients on Trump accounts, ABLE rollovers, and new charitable giving floors.
• Watch out for the dead period in OZ eligibility and plan accordingly.