The new bill has passed, and it includes several important tax changes that could affect your finances in 2025. Here's a breakdown of the key updates you should be aware of. If you have any questions or want to chat about how these changes impact you, feel free to reach out.

SALT Deduction Increase

The deduction for state and local property taxes (SALT) has been bumped up significantly from $10k to $40k. However, there's a phaseout: if your income surpasses $500k, the $40k limit starts to decrease.

New Senior Deduction

Seniors get a new deduction of $6k, which begins to phase out after income exceeds $75k. This aims to reduce the amount of Social Security income subject to tax.

State PTE Salt Workarounds

Good news! There are no restrictions on using State PTE Salt Workarounds, meaning the program will continue for your business and investors without issue.

Donations Made Easier

A permanent $1k deduction ($2k for married filing jointly) is now available for donations, and the best part—you don't need to itemize personal deductions.

Tip Income

For those who earn tip income, up to $25k will now be non-taxable. A nice break for those working in service industries.

Overtime Income

Up to $12,500 in overtime income will be non-taxable, giving those who work extra hours some relief.

Estate Tax Exemption

Starting in 2026, the estate tax exemption will rise to $15 million for single filers and $30 million for married couples filing jointly.

Bonus Depreciation

For businesses, the 100% bonus depreciation for equipment and structures is restored for items placed in service after January 19, 2025. A great opportunity to save on investments.

EV Car Tax Credit

Thinking of buying a new electric vehicle? The $7,500 tax credit will expire after September 30 for cars purchased after that date. If you’re in the market, now's the time to act!

These updates could provide significant savings or changes in your financial planning. If you want to go over how they apply to your situation, don’t hesitate to get in touch!

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