Tax Updates

Federal Tax Law Updates and Adjustments for Individuals and Businesses 

Individual Tax Changes 

• TCJA tax brackets permanently extended (10%–37%). 

• Standard deduction increases in 2025 ($31,500 MFJ; $23,625 HOH; $15,750 Single/MFS). 

• Child Tax Credit increased to $2,200 with refundable amounts indexed. 

• QBI §199A deduction made permanent; new $400 minimum deduction; phaseouts raised to $75k/$150k MFJ. 

• Estate exemption resets to a $15M base in 2026, indexed thereafter. 

• Mortgage interest and casualty loss restrictions made permanent. 

• SALT cap temporarily increased to $40k in 2025; returns to $10k after 2029. 

• Trump Accounts created for children ages 0–17 with federal seeding and LTCG treatment. 

Business Tax Changes 

• 100% Bonus Depreciation permanently reinstated after Jan. 19, 2025. 

• R&E §174 full expensing allowed beginning 2025, retroactive election for small businesses. 

• §163(j) interest limitation rules made permanent. 

• §179 increased to $2.5M with phaseout at $4M. 

• Special depreciation for qualified production property (QPP) through 2031. 

• QSBS exclusion cap raised to $15M with tiered percentages based on holding period. 

• Excess Business Loss limitation made permanent. 

IRS/Compliance Updates 

• 1099-K threshold reverts to $20k/200 transactions. 

• 1099-MISC/NEC threshold raised to $2,000 starting 2026. 

• ERC enforcement tightened; new penalties and extended 6-year statute. 

• Direct File suspended pending redesign. 

• Simple payment plans available for ≤$50,000 balances. 

• Federal paper checks eliminated after September 30, 2025. 

Health & Retirement 

• HSAs expanded starting 2026; new limits $4,400 self-only and $8,750 family. 

• 2025 retirement contribution limits updated (IRAs, SIMPLE, 401(k)).