The New Tax Bill Passed — Here’s What You Need to Know

It’s official: the new tax bill has passed, and whether you're a business owner, W-2 worker, investor, or retiree, there’s something in it for you. From expanded deductions to new tax breaks on income you might not expect, the updates are wide-reaching—and worth knowing about.

Here are the key highlights, broken down in plain English:

SALT Deduction: Bigger Break, With Some Limits

The deduction for state and local taxes (SALT) has increased from the long-standing $10,000 cap to $40,000. That’s a big win for folks in high-tax states. However, there’s a catch: once your income hits $500,000, that expanded benefit starts phasing out. So if you’re earning above that threshold, your deduction will shrink accordingly.

A Win for Seniors: New $6,000 Deduction

Seniors now get a $6,000 deduction per person, aimed at making more of their Social Security income tax-free. That deduction begins phasing out once income goes above $75,000, so middle-income retirees stand to benefit the most.

State PTE SALT Workarounds Stay in Place

For those using pass-through entity (PTE) SALT workarounds, nothing changes. There were no new restrictions introduced, meaning your business—and its investors—can continue to use these strategies to reduce state tax exposure.

Charitable Giving Made Easier

Donating to a cause just became more rewarding. There’s now a permanent $1,000 deduction for charitable contributions, or $2,000 if you’re married filing jointly—and here’s the kicker:You don’t have to itemize to claim it.

New Breaks for Tip and Overtime Income

Service industry workers and anyone pulling extra hours get some relief.

• Tip income: Up to $25,000 is now non-taxable

• Overtime pay: Up to $12,500 is non-taxableThis could make a real difference for hourly workers and gig economy earners.

Estate Tax Exemption Rises in 2026

Looking ahead, the federal estate tax exemption is getting a big bump starting in 2026—up to $15 million for individuals, and $30 million for married couples.That’s huge for families focused on legacy and wealth transfer planning.

Bonus Depreciation Is Back

Businesses, take note: 100% bonus depreciation is back for all equipment and structures placed in service after January 19, 2025. This could mean significant upfront savings if you’re investing in property or major equipment in the coming year.

The EV Tax Credit Clock Is Ticking

The popular $7,500 electric vehicle tax credit will expire for vehicles purchased after September 30. So if you’ve been thinking about going electric, now’s the time to act.

Final ThoughtsThis new bill covers a lot of ground—and for once, it’s not just good news for one group. Whether you’re trying to lower your taxable income, grow your business, or plan for retirement, there’s opportunity here.

Have questions about how this impacts you or your business? Let’s talk. We’re here to help you strategize and make the most of every update.