17 Must-Know Tax Changes to Lower Your Taxes, The Value of a Stone, And More

Read Time: 4-minutes

Happy Saturday,

Here is this week’s edition of 6-Point Saturday — financial insights to help you make smarter money decisions.

Let’s get into it.

Point #1 — The Value of a Stone

The lesson here is pretty powerful:

Sometimes, all we need is a different environment.

It’s also a reminder that we have agency or control over how much we’re valued.

Whether it’s looking for a new employer who compensates you appropriately or positioning your “side hustle” properly with better marketing, a simple change of scenery can do wonders.

Point #2 — 17 Must-Know Tax Changes for Lower Taxes

In case you missed it, the massive new bill — 870 pages — referred to as the “One, Big, Beautiful Bill” was signed into law last week.

We’ve been monitoring the potential changes & opportunities as it’s gone through both the House and the Senate.

Now that it has been signed into law by the President, let’s highlight 17 must-know tax changes from tax expert Jeffrey Levine’s initial interpretation over the next 3 points.

To kick off, let’s start with some of the fundamentals:

1. Income tax brackets: The seven current income tax brackets are now permanent: 10%, 12%, 22%, 24%, 33%, 35%, 37%. (Permanent in the sense that they are not going to sunset/go away at a set date in the future.)

2. Standard Deduction permanently, roughly doubles (from before the 2017 Tax Cuts and Jobs Act). We get a small bump starting this year: Single: $15,750 (up from $15k), for Married Filing Jointly (MFJ): $31,500 (up from $30k), and for filing Head of Household: $23,625 (up from $22.5k).

3. Personal exemption deductions and Miscellaneous itemized deductions are permanently removed.

Point #3 — 17 Must-Know Tax Changes for Lower Taxes…Continued

Now, we’ll look at some of the more widely applicable items:

4. The “big one” (where many were interested): SALT, or State and Local Income Taxes deduction:

   • Now increased to $40k (!) from the $10k it’s been. The extra $30k deduction is phased out at 30% of Adjusted Gross Income over $500k. This new $40k SALT deduction is available for the current 2025 tax year, but sunsets after 2028 back to the $10k/$5k amount.

5. New car loan interest deduction. Up to $10k annually, but only for new cars with final assembly in the US. Phases out for joint filers earning over $200k (disappears at $250k, $100k for everyone else). Applies to loans from 2025-2028.

6. Charitable deduction for non-itemizers. Joint filers get $2k deduction ($1k for singles) starting in 2026 (and this deduction is permanent). But people who itemize deductions now face a hurdle: the first 0.5% of income in charitable contributions won't be deductible.

7. Child Tax Credit gets a small bump to $2,200 (from $2k) per qualifying child beginning this year, now inflation-adjusted and permanent.

8. New, so-called “Trump Accounts” for children under 18. Parents can contribute up to $5,000 annually (no tax deduction), and the money grows tax-deferred until age 18. Must be invested in a qualified index: U.S. mutual fund or ETF. Employers can contribute up to $2,500 to employees’ children’s accounts and exclude from their income. The IRS will contribute $1,000 to accounts for children born between 2025-2028. In general, no distributions before age 18.

9. Employer student loan assistance: Permanent $5,250 exclusion remains in place. Your employer can pay up to $5,250 toward your student loans annually, and you don't have to count it as taxable income.

10. Tips and Overtime. "No tax on tips" and "No tax on overtime" deductions. This is a pretty nice deduction. Each maxes at $25k for joint filers, phasing out by 10% over $300k income. $12.5k and $150k for others. Available 2025-2028. The IRS will publish a list of occupations that qualify within 90 days.

11. Alternative Minimum Tax (AMT): The AMT exemption phaseout thresholds reset back to 2018 levels: $1 million for joint filers (versus current $1.25 million), $500k for singles. So, most will continue to be unaffected by AMT (but more higher earners may get hit with AMT) starting in 2026 because of the reset.

Point #4 — 17 Must-Know Tax Changes for Lower Taxes…Continued

Some notable business and estate tax items:

12. Qualified Business Income Deduction (QBI): QBI deduction for pass-through businesses becomes permanent and the phaseout range expands ($150k for joint filers and $75k for others). There's a new $400 minimum deduction if you have at least $1,000 in business income.

13. Pass-Through Entity Tax (PTET) Deduction: PTETs are unaffected by the new bill. PTETs have allowed business owners to pay their SALT taxes through their business, instead of personally, to get around the SALT deduction cap.

14. Section 179: Section 179 expensing jumps to $2.5 million (from $1 million), with phaseout starting at $4 million in equipment purchases (This means you can immediately write off much larger equipment purchases instead of depreciating them over time).

15. Bonus Depreciation: Bonus depreciation returns to 100% for qualifying assets placed in service after January 20, 2025. This had been phasing out, so having it back permanently is big for business investment planning.

16. New deduction for seniors (65+): Up to $6k additional deduction per person, but phases out for higher earners ($150k Married Filing Jointly and $75k for others). Available from 2025-2028.

17. Lifetime Estate Tax Exemption: Lifetime estate tax exemption increases to $15 million per person ($30 million per couple), up from the current $13.99 million.

Point #5 — Quotes of the Week

Point #6 — My Questions of the Week

Reply to let me know! I read all responses.

Thanks for reading — I hope you found a helpful idea or two.

I’ll see you next Saturday with more.

Have a great weekend,

Benjamin Daniel, CFP®

Founder, Money Wisdom

P.S. Want to take control of your money (and stop stressing)? Here are 2 ways I can help:

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Disclaimer:

This material is not investment or tax advice. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading this material can be accepted by the publisher.

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