US RECENT TAX LAW CHANGES

INDIVIDUALS -

One Big Beautiful Bill Act (OBBBA) Signed Into Law

• OBBBA was enacted on July 4, 2025, creating significant changes for individuals and businesses alike.

Permanent Tax Rates & TCJA Extensions

• The federal income tax brackets established by the Tax Cuts and Jobs Act (TCJA) are now made permanent.

Standard Deduction and SALT Deductions

• Standard deductions increased for tax year 2025 (filed in 2026).
• Married Filing Jointly: ~$31,500
• Single: ~$15,750
• Head of Household: ~$23,625

• State and Local Tax (SALT) deduction cap temporarily increased to $40,000 with phased-out limits for higher earners.

New Individual Tax Relief Provisions

• Enhanced credits and potential refunds expected for working families due to changes like eliminating federal tax on tips, overtime pay, and auto loan interest (phased in future years).
• New non-refundable education contribution credit (up to about $1,700) tied to qualifying contributions to scholarship organizations under the new law.

Expanded Health Savings Accounts (HSAs)

• Changes expanding eligibility (e.g., telehealth services, bronze/catastrophic plans) become effective 2026.

BUSINESSES & CORPORATIONS -

Foreign Income Tax Regime Reforms

• The foreign-derived intangible income (FDII) framework was renamed FDDEI and revised, with revised deduction calculations and expanded definitions.
• GILTI reform: "Global Intangible Low-Taxed Income" is now Net CFC Tested Income with updated rates and rules.

Qualified Business Income (QBI) Deduction

• Section 199A deduction (20% for pass-throughs) is extended (permanent under current law), providing ongoing tax relief for LLCs, S-corps, partnerships.

Immediate Expensing of R&D Costs

• New provisions allow full expensing of domestic research and experimental expenditures for eligible businesses instead of long amortization.

Estate & Gift Tax Changes

• Estate and gift tax exemptions are permanently increased (about $15M individual / $30M married), with future inflation adjustments.

Enhanced Business Incentives

• Expanded opportunity zones program, bonus depreciation, and full expensing of qualified production property.

Compliance & Reporting Updates Still Phased In

• For tax year 2025 filings, key payroll forms and withholding tables remain unchanged while IRS phases in new reporting requirements for tips and overtime.