Big news in the world of taxes: The One Big Beautiful Bill Act has passed and with it comes a sweeping set of tax reforms that will take effect starting in 2025. These changes touch nearly every corner of the tax code—from families and workers to small business owners and real estate investors. Below is a breakdown of what you can expect, how it may affect you, and what steps we’re taking to help you plan ahead.
This information is from a Facebook Post Todd Van Meter shared in the MAREI Forum Online. See Post and Connect with Todd on Facebook: Click Here
His information came from the Keystone CPA team.
Tax Code Changes from the Big Beautiful bill
Check out the items I have put in Bold, here is what may affect you the most with the new tax bill. Some great opportunities to reduce taxes.
Business & Real Estate Tax Changes
100% bonus depreciation is returning in full and allows for immediate expensing of eligible business assets purchased after January 19, 2025. This effectively more than doubled the previous 2025 tax benefit.
The current benefit that allows up to 20% of taxable income to be potentially tax-free has been made permanent. This is especially helpful for those with real estate income such as rentals, commissions, flips, and property management just to name a few.
For businesses, Section 179 expense now allows for up to $2.5 million of immediate deductions on qualifying property. And if you invest in certain startups or growth-oriented companies, the Small Business Stock Gain Exclusion allows you to potentially exclude up to 100% of the gain if the qualified stock is held for at least five years.
Opportunity zone tax benefits are extended which helps to defer capital gains taxes on sale of real estate (and eliminate any Capital Gains tax on the sale if you own it at least 10 years-T.V.), stocks, and other assets. There is also a new tax benefit that allows for 100% expensing of commercial real estate used in manufacturing businesses.
Personal Tax Changes: More Opportunities for Families and Workers
The deduction limit for State and Local Taxes will jump from $10,000 to $40,000 starting in 2025. This is especially beneficial for high-tax states. There is a phase-out of this deduction that kicks in when your income exceeds $500,000.
Starting in 2025, workers earning wages, 1099, or tips will see some unique benefits (Please pay me for all my Great guidance in tips so it is tax free, Thanks T.V. lol). Up to $25,000 of tip income may be tax-deductible. For those working overtime, there’s now a deduction for overtime pay of up to $12,500 for single filers (or $25,000 for joint filers). The income phaseout for tax benefits for both tips and overtime pay begin at $150,000 (or $300,000 for joint filers).
The Child Tax Credit is getting a boost. It will increase the child tax credit to $2,200 per child, with $1,400 of that amount refundable. The income phaseout is $200,000 (or $400,000 for joint filers). There is also a new a tax-deferred savings vehicles for children under 18 referred to as the “Trump Accounts”. The max is $5,000 annually. There’s also a one-time $1,000 tax credit for newborns, available starting in 2025.
Buying a car? If you purchase certain vehicles assembled in the U.S. in 2025, you may deduct up to $10,000 in car loan interest annually. The income limitations is $100,000 (or $200,000 for joint filers).
For the charitable minded givers, we can now deduct up to $1,000 (or $2,000 for joint filers) even if you don’t claim itemized deductions. And if you are planning for college, the 529 education savings plans have also expanded in scope and now covers additional qualified K–12 and home school expenses.
What This Means for You
We are already reviewing the details and building updated tax strategies tailored to these reforms. The IRS is expected to provide additional guidance on many of these new changes. We will keep you updated with any additional information in the coming weeks.
Let’s make 2025 your most tax-beneficial year yet.
Keystone CPA team
Also, there were no changes to Tax Deferral strategies like 1031’s and Installment Sales to a Trust that can allow you to move into different assets and defer the capital gains and straight line depreciation recapture taxes. (T.V.)
Also, there were no changes to Tax Deferral strategies like 1031’s and Installment Sales to a Trust that can allow you to move into different assets and defer the capital gains and straight line depreciation recapture taxes. (T.V.)
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