Now that the Big Beautiful Bill is the law of the land here are some key points of the Bill: 

• Makes the 2017 Tax Cuts and Jobs Act perminate (was set to expire at the end of 2025)
• No Tax on Tips, almost: Starting this year, the first $25,000 of tips will be tax-deductible through 2028 with $150K income limit ($300K filing jointly). 
• No Tax on overtime , almost: Starting this year, the first $25,000 of tips will be tax-deductible through 2028 with $150K income limit ($300K filing jointly).
• Standard Deduction: Permanently raises standard deduction to $15,750 for individuals, $31,500 for married couples and $23,625 for heads of households. After 2025, it will be adjusted for inflation.
• SALT deduction: Raises the cap from $10,000 to $40,000 and increases 1% annually. Deduction starts in 2025 and falls back to $10,000 in 2029.
• Car loan interest deduction: Car buyers could deduct up to $10,000 annually in car loan interest payments if they buy a vehicle assembled in the U.S. The deduction phases out between $100K and $150K and between $200K and $250K if you file jointly.
• Senior Tax Deduction: Through 2028, each person over 65 can deduct an additional $6,000. The deduction begins phasing out at $75K ($150K if you file jointly). Expires at the end of 2028.
• Increased Child Tax Credit: Raises the child tax credit from $2,000 to $2,200. After 2025, it will be adjusted for inflation.
• Bigger Estate Tax Exemption: Allows people to pass $15 million tax-free to their heirs. Without the change, the almost $14 million exemption would have expire at the end of 2025 and revert to just over $7 million
• Savings Accounts for Kids: Children born between January 1st 2025 and January31st 2029 would receive $1,000 each to open special savings accounts. Tax-free contributions to account limited to $5,000 annually until the child is 18. Savings can be used after the child turns 18.
• Private School Vouchers:  Up to $5,000 in tax credits to use for education from private schools to homeschooling. Who is eligible: Families who make less than three times their local median income.
• Electric Vehicle and Clean Energy Tax Credits: It ends a $7,500 tax credit for households that buy or lease a new electric vehicle, and a $4,000 tax credit for buyers of used EVs. These tax credits would disappear after Sept. 30, 2025. Additionally, it would scrap tax breaks for consumers who make their homes more energy-efficient, perhaps by installing rooftop solar, electric heat pumps, or efficient windows and doors. These credits would end after Dec. 31, 2025.
• Section 199A Pass-Thriugh Business Deduction: Another key provision in the legislation offers a bigger deduction for so-called pass-through businesses, which includes contractors, freelancers and gig economy workers. Enacted via Trump’s 2017 tax cuts, the Section 199A deduction for qualified business income will become permanent and remain at up to 20% of eligible revenue, with some limits. It was set to expire after 2025, but the new legislation makes the deduction permanent. 

Here are some other key changes:

• Cuts to Medicaid: New federal work rules would require beneficiaries ages 19 to 64 who apply for coverage or who are enrolled through an Affordable Care Act expansion group to work at least 80 hours per month. Adults may be exempt if they have dependent children or other qualifying circumstances such as a medical condition. Notably, the Senate version of the bill proposed stricter limits on exemptions for parents, limiting it to those with dependent children ages 14 and under. 

  The proposed Medicaid changes would also require states to conduct eligibility redeterminations for coverage every six months, rather than every 12 months based on current policy.

• Restrictions on Food Stamps:  The bill still shifts the costs of SNAP, or food stamps, to some states. The program is currently fully funded by the federal government.

  The federal government would continue to fully fund the benefits for states that have an error payment rate below 6%, beginning in 2028. States with error rates above 6% would be on the hook for 5% to 15% of the costs. States are also given some flexibility in calculating their share. Currently, in order to qualify, able-bodied adults between 18 and 54 must meet work requirements. Both the Senate and House bills would update the age requirement to 18 and 64, with some exemptions for parents. Alaska and Hawaii could receive waivers for the work requirements if it's determined that they're making a "good faith effort" to comply. 

• Homeland Security: The legislation includes more than $46.5 billion for border wall construction and related expenses, $45 billion to expand detention capacity for immigrants in custody and about $30 billion in funding for hiring, training and other resources for U.S. Immigration and Customs Enforcement. It also includes a minimum $100 fee for those seeking asylum, down from the $1,000 fee outlined in the initial House bill. 
• Addressing the Debt Limit: The legislation would raise the debt ceiling by $5 trillion, going beyond the $4 trillion outlined in the initial House-passed bill.
• Lower Student Loan Limits, Fewer Benefits: The bill makes many changes to student loans, new payment plan, borrowing limits, and a few others. If youhave student loans or are looking to aquire any you must do further research.

If you would like to sit down and discuss any of these tax related issues please rewach out to us:Call us at 516-671-3344 or 516-623-7700 or by email: info@contaxpan,com