Tax Credits Archives

What the Passage of the One Big Beautiful Bill Mean for You and Your Business

By Office Staff|2025-07-16T12:11:14-07:00July 16, 2025|Categories: Legislation|Tags: Bonus Depreciation, Child Tax Credits, One Big Beautiful Bill, Overtime Tax, Pass-Through Entity, SALT Deduction, Social Security Tax, Tax Credits, Tax on Tips, TCJA|1 Comment

On July 3, 2025, Congress passed H.R. 1, a sweeping piece of tax legislation known as the One Big Beautiful Bill Act (OBBB). The OBBB is a nearly 1,000-page tax package aimed at preserving and expanding key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) and so much more.

This pro-growth bill prevents the expiration of certain tax breaks while adding a host of new tax relief measures, including “no tax on tips,” “no tax on overtime pay,” “no tax on car loan interest,” and “no tax on Social Security.” It also provides tax incentives to businesses that manufacture in the U.S. and hire more U.S. workers, and it rolls back many of the green energy credits that we’ve written about in previous blog posts.

This post summarizes the most important changes found in the new law, which was signed by the President on July 4, 2025, focusing on provisions that directly affect individual taxpayers (as compared to corporations). Understanding these updates is important, whether you’re a high net-worth individual or family member, an employee, a small-business owner or entrepreneur, a parent, or a retiree. Or maybe you just want to know how these tax code changes are likely to affect you and how you can maximize your tax savings legally.

Here’s what you need to know.

Individual Tax Rates and the Standard Deduction

The 2017 Tax Cuts and Jobs Act (TCJA) reduced most individual income tax rates. The 15 percent bracket dropped to 12 percent, the 25 percent bracket to 22 percent, the 28 percent bracket to 24 percent, the 33 percent bracket to 32 percent, and the top 39.6 percent bracket to 37 percent. The One Big Beautiful Bill Act (OBBB) locks in these rate structures permanently.

Tax Relief at a Cost? While tax relief is always welcome, according to the Congressional Budget Office (CBO), doing so will add $2.2 trillion to the federal deficit over the next decade.

The standard deduction, which was nearly doubled in 2017, is also made permanent by the OBBB and temporarily increased further for tax years 2025–2028:

$15,750 for single filers
$23,625 for heads of household
$31,500 for joint filers

This expansion reduces the number of itemizers and simplifies filing for most taxpayers. It is estimated to cost $1.4 trillion over 10 years, according to the CBO.

The Child Tax Credit

The 2017 Tax Cuts and Jobs Act (TCJA) doubled the Child Tax Credit from $1,000 to $2,000 per child. The OBBB makes this adjustment permanent, increasing it temporarily to $2,500 through 2028. Inflation adjustments begin in 2026. The $500 credit for non-child dependents also becomes permanent. These changes will cost an estimated $817 billion over 10 years, according to the CBO.

The Qualified Business Income (QBI) Deduction

To maintain parity between pass-through businesses and C corporations, the 2017 Tax Cuts and Jobs Act created a 20 percent deduction for qualified business income. The new law keeps this deduction and increases it to 23 percent starting in 2026. It also expands eligibility and adjusts phaseout thresholds to avoid income cliffs. Continue reading… Continue reading… Continue reading…

Small Business Guide to Reducing Your Tax Burden Legally — Part 1: Tax Planning

By Office Staff|2020-10-08T20:54:48-07:00July 16, 2020|Categories: Taxes|Tags: 2020 Tax Brackets, Adjustments to Income, Itemized Deductions, Small Business Guide to Legally Reducing Your Tax Burden, Tax Credits, Tax Planning, Tax System|0 Comments

Welcome to Part 1 of our 12-part series on how to reduce your tax burden legally. Here in Part 1, we address the first and most important step — tax planning. As the old saying goes, “Failing to plan is planning to fail,” and this is especially true when you are trying to reduce your tax burden legally.

Consider for a moment the first time you drove a car? If you were doing it right, you spent far more time looking where you were going than where you came from. You don’t drive forward staring in the rearview mirror. Unfortunately, that’s how most tax “specialists” are geared. They spend so much time looking back at last year’s finances that they rarely advise their clients to look forward.

They can tell you all about what you earned and spent last year and how much you owe in taxes as a result, but they rarely think to tell you what you should do today to save on taxes next year. Even the few who do tell their clients what to do rarely tell them when or how to do it.

Taking a proactive, forward-looking approach with tax planning can simplify next year’s taxes and save you a considerable amount of money, especially if you’re a small-business owner. Tax planning provides small-business owners with two valuable benefits:

Benefit No. 1: First, tax planning is a key component in your financial protection. As a small to medium size business owner, you have two ways to increase your net profits: financial offense (earning more) and financial defense (spending less). For most small-business owners, taxes are the biggest expense, so a big part of playing financial defense involves reducing the tax burden. And you do that through savvy tax planning.

Benefit No. 2: Second, participating in tax planning almost always ensures results. You can spend a huge amount of time, effort, and money promoting your business with no guarantee of achieving positive results. In contrast, every tax-savings initiative you implement guarantees a return on your investment. But those guaranteed results start with planning. For example, you can’t deduct medical expenses paid out of a medical expense reimbursement plan if you haven’t set up such a plan ahead of time.

To get this series started, indulge us for a moment as we cover how the tax system works here in the United States of America.

Understanding How the Tax System Works

A general knowledge about how the tax system works lays the foundation for understanding specific tax-savings approaches we present later on in this post. Here’s a graphic demonstrating how the tax system works: Continue reading… Continue reading… Continue reading…