President Trump signs his One, Big, Beautiful Bill Act into law

Including a letter of instruction in your estate plan is a simple yet powerful way to communicate your personal wishes to your family and executor outside of formal legal documents. While not legally binding, the letter can serve as a road map to help those managing your estate carry out your wishes with fewer questions or disputes.  Contents of your letter What your letter addresses largely depends on your personal circumstances. However, an effective letter of instruction must cover the following: Documents and assets. State the location of your will and other important estate planning documents, such as powers of attorney, trusts, living wills and health care directives. Also, provide the location of critical documents such as your birth certificate, marriage license, divorce documents and military paperwork. Next, create an inventory — a spreadsheet may be ideal for this purpose — of all your assets, their locations, account numbers and relevant contacts. These may include, but aren’t necessarily limited to: Checking and savings accounts, Retirement plans and IRAs, Health and accident insurance plans, Business insurance, Life and disability income insurance, and Stocks, bonds, mutual funds and other investment accounts. Don’t forget about liabilities. Provide information on mortgages, debts and other loans your family should know about. Digital assets. At this point, most or all of your financial accounts may be available through digital means, including bank accounts, securities and retirement plans. It’s critical for your letter of instruction to inform your loved ones on how to access your digital accounts. Accordingly, the letter should compile usernames and passwords for digital financial accounts as well as social media accounts, key websites and links of significance. Funeral and burial arrangements. Usually, a letter of instruction will also include particulars about funeral and burial arrangements. If you’ve already made funeral and burial plans, spell out the details in your letter. This can be helpful to grieving family members. You may want to mention particulars like the person (or people) you’d like to give your eulogy, the setting and even musical selections. If you prefer cremation to burial, make that abundantly clear. Provide a list of people you want to be contacted when you pass away and their relevant information. Typically, this will include the names, phone numbers, addresses and emails of the professionals handling your finances, such as an attorney, CPA, financial planner, life insurance agent and stockbroker. Finally, write down your wishes for any special charitable donations to be made in your memory. Express your personal thoughts Your letter of instruction complements the legal rigor of your estate planning documents with practical and personal guidance. Indeed, one of the most valuable functions of a letter is to offer personal context or emotional guidance. You can use it to explain the reasoning behind decisions in your will, share messages with loved ones, or express values and hopes for the future. Contact us if you’d like additional information. © 2025

We’ve reached a point where artificial intelligence (AI) offers functionality and enhancements to most businesses. Yours may be able to use it to streamline operations, improve customer interactions or uncover growth opportunities. However, getting the max benefit calls for doing much more than jumping on the bandwagon. To make this technology truly work for your company, you’ve got to develop a comprehensive AI strategy that aligns with your overall strategic plan. Identify your needs Many businesses waste resources, both financial and otherwise, by hastily investing in AI without thoroughly considering whether and how the tools they purchase effectively address specific needs. Before spending anything — or any more — sit down with your leadership team and ask key questions such as: What strategic problems are we trying to solve? Are there repetitive tasks draining employees’ time and energy? Could we use data more effectively to guide business decisions? The key is to narrow down specific challenges or goals to actionable ways that AI can help. For example, if your staff spends too much time manually sorting and answering relatively straightforward customer inquiries, a simple AI chatbot might ease their workload and free them up for more productive activities. Or if forecasting demand is a struggle, AI-driven analytics may help you develop a clearer picture of future sales opportunities. Be strategic As you develop an AI strategy, insist on targeted and scalable investments. In other words, as mentioned, prospective solutions must fulfill specified needs. However, they also need to be able to grow with your business. In addition, consider whether the AI tools you’re evaluating suit your budget, have reliable support and will integrate well with your current systems. Don’t ignore the tax implications either. The recently passed One, Big, Beautiful Bill Act has enhanced depreciation-related tax breaks that AI software may qualify for if you buy it outright. Provide proper training Training is another piece of the puzzle that often goes missing when businesses try to implement AI. Earlier this year, the Pew Research Center published the results of an October 2024 survey of more than 5,200 employed U.S. adults. Although 51% of respondents reported they’d received extra training at work, only 24% of that group said the training was related to AI. This would seem to indicate that AI-specific training isn’t exactly commonplace. Make sure to build this component into your strategy. Proper training will help ensure a smoother adoption of each tool and increase your odds of a solid return on investment. As you provide it, also ease employee concerns about job loss or disruption. That same Pew Research Center survey found that 52% of workers who responded are worried about the future impact of AI in the workplace. You may want to help your staff understand how the technology will support their work, not replace it. Measure and adjust As is the case with any investment, every AI tool you procure — whether buying it or signing up for a subscription — should deliver results that justify its expense. While shopping for and rolling out a new solution, clearly establish how you’ll measure success. Major factors may include time saved, customer satisfaction and revenue growth. Once a solution is in place, don’t hesitate to make adjustments if something isn’t working. This may involve providing further training to users or limiting the use of an AI tool until you gain a better understanding of it. If you’re using a subscription-based solution, you may be able to cancel it early. However, first check the contract terms to determine whether you’d suffer negative consequences such as a substantial termination fee or immediate loss of data. Account for everything There’s no doubt that AI has a lot to offer today’s small to midsize businesses. Unfortunately, it can also be overwhelming and financially costly if you’re not careful about choosing and implementing solutions. We can help you develop an AI strategy that accounts for costs, tax impact and return on investment.  © 2025

The One, Big, Beautiful Bill Act (OBBBA) has introduced significant tax changes that could affect families across the country. While many of the provisions aim to provide financial relief, the new rules can be complex. Below is an overview of the key changes. Adoption credit enhanced Parents who adopt may be eligible for more generous tax relief. Under current law, a tax credit of up to $17,280 is available for the costs of adoption in 2025. The credit begins to phase out in 2025 for taxpayers with modified adjusted gross income (MAGI) of $259,190 and is eliminated for those with MAGI of $299,190 or more. If you qualify, the adoption credit can reduce your tax liability on a dollar-for-dollar basis. This is much more valuable than a deduction, which only reduces the amount of income subject to tax. What changed? Beginning in 2025, the OBBBA makes the adoption tax credit partially refundable up to $5,000. This means that eligible families can receive this portion as a refund even if they owe no federal income tax. Previously, the credit was entirely nonrefundable, limiting its benefit to families with sufficient tax liability. The refundable amount is indexed for inflation but can’t be carried forward to future tax years. Child Tax Credit increased, and new rules imposed Beginning in 2025, the OBBBA permanently increases the Child Tax Credit (CTC) to $2,200 for each qualifying child under the age of 17. (This is up from $2,000 before the law was enacted). The credit is subject to income-based phaseouts and will be adjusted annually for inflation after 2025. The refundable portion of the CTC is made permanent. The refundable amount is $1,700 for 2025, with annual inflation adjustments starting in 2026. The MAGI phaseout thresholds of $200,000 and $400,000 for married joint-filing couples are also made permanent. (However, these thresholds won’t be adjusted annually for inflation.) Important: Starting in 2025, no CTC will be allowed unless you report Social Security numbers for the child and the taxpayer claiming the credit on the return. For married couples filing jointly, a Social Security number for at least one spouse must be reported on the return. Introduction of Trump Accounts We’re still in the early stages of learning about this new type of tax-advantaged account but here’s what we know. Starting in 2026, Trump Accounts will offer some families a way to save for the future. An account can be set up for anyone under age 18 at the end of the tax year who has a Social Security number. Annual contributions of up to $5,000 (adjusted annually for inflation after 2027) can be made until the year the child turns 18. In addition, U.S. citizen children born after December 31, 2024, and before January 1, 2029, with at least one U.S. citizen parent, may potentially qualify for an initial $1,000 government-funded deposit. Contributions aren’t deductible, but earnings grow tax deferred as long as they’re in the account. The account generally must be invested in exchange-traded funds or mutual funds that track the return of a qualified index and meet certain other requirements. Employers may make contributions to Trump accounts on behalf of employees’ dependents. Withdrawals generally can’t be taken until the child turns age 18. Even more changes Here are three more family-related changes: The child and dependent care credit. This credit provides parents a tax break to offset the cost of child care when they work or look for work. Beginning in 2026, there will be changes to the way the credit is calculated and the amount of income that parents can have before the credit phases out. This will result in more parents becoming eligible for the credit or seeing an increased tax benefit. Qualified expenses for 529 plans. If you have a 529 plan for your child’s education, or you’re considering starting a plan, there will soon be more opportunities to make tax-exempt withdrawals. Beginning in 2026, you can withdraw up to $20,000 for K-12 tuition expenses, as well as take money out of a plan for qualified expenses such as books, online education materials and tutoring. These withdrawals can be made if the 529 plan beneficiary attends a public, private or religious school. Sending money to family members in other countries. One of the lesser-known provisions in the OBBBA is that the money an individual sends to another country may be subject to tax, beginning in 2026. The 1% excise tax applies to transfers of cash or cash equivalents from a sender in the United States to a foreign recipient via a remittance transfer provider. The transfer provider will collect the tax as part of the transfer fee and then remit it quarterly to the U.S. Treasury. Transfers made through a financial institution (such as a bank) or with a debit or credit card are excluded from the tax.  What to do next These and other changes in the OBBBA may offer substantial opportunities for families — but they also bring new rules, limits and planning considerations. The sooner you start planning, the better positioned you’ll be. Contact us to discuss how these changes might affect your family’s tax strategy.

The One, Big, Beautiful Bill Act (OBBBA) includes, among many other things, numerous provisions that can affect an individual’s taxes. The new law makes some changes to existing tax breaks that will be significant to many, but not all, taxpayers. It also creates new breaks that, again, will be significant to certain taxpayers. Finally, it makes permanent the tax rate reductions and most of the changes to deductions and credits made by the Tax Cuts and Jobs Act (TCJA), with occasional tweaks. State and local tax deduction The OBBBA increases the limit on the state and local tax (SALT) deduction through 2029. Beginning in 2025, eligible taxpayers can deduct up to $40,000 ($20,000 for married couples filing separately) of SALT, including property tax and either income tax or sales tax, with a 1% annual increase thereafter. However, in 2030, the previous limit of $10,000 ($5,000 for separate filers) will resume. When modified adjusted gross income (MAGI) exceeds $500,000 ($250,000 for separate filers), the cap is reduced by 30% of the amount by which MAGI exceeds the threshold — but not below $10,000 ($5,000 for separate filers). If you expect to be near or over the threshold, taking steps to reduce your MAGI (for example, increasing retirement plan contributions or making IRA qualified charitable distributions) could help you secure the full SALT deduction. Child Tax Credit The $2,000 Child Tax Credit (CTC) for children under age 17 was slated to return to $1,000 per child after 2025, with the income phaseout levels subject to lower thresholds. Also, the $500 Credit for Other Dependents (COD) was scheduled to expire at that time. The COD is available for each qualifying dependent other than a qualifying child (such as a dependent child over the age limit or a dependent elderly parent). The OBBBA makes the doubled CTC permanent, with an increase to $2,200 starting this year and annual inflation adjustments to follow. It also makes permanent the $1,400 refundable portion of the CTC, adjusted for inflation ($1,700 in 2025), and the $500 nonrefundable COD. And it makes permanent the income phaseout thresholds of $200,000, or $400,000 for joint filers. Education-related breaks The OBBBA expands the definition of qualified expenses that can be paid for with tax-free distributions from Section 529 plans. For example, tax-free distributions can now cover qualified post-secondary credentialing expenses. In addition, tax-free elementary and secondary school distributions are no longer limited to paying tuition; they can also pay for books and other instructional materials, online educational materials, tutoring or educational classes outside the home, and certain testing fees. The OBBBA also increases the annual limit on tax-free distributions for qualified elementary and secondary school expenses from $10,000 to $20,000 beginning in 2026. In addition, the law creates a tax credit of up to $1,700 for contributions to organizations that provide scholarships to elementary and secondary school students. Students who benefit from the scholarships must be part of a household with an income that doesn’t exceed 300% of the area’s median gross income and be eligible to enroll in a public elementary or secondary school. The OBBBA also makes some tax law changes related to student loans: Employer-paid student loan debt. If your employer pays some of your student loan debt, you may be eligible to exclude up to $5,250 from income. The OBBBA makes this break permanent, and the limit will be annually adjusted for inflation after 2026. Forgiven student loan debt. Forgiven debt is typically treated as taxable income, but tax-free treatment is available for student loan debt forgiven after December 31, 2020, and before January 1, 2026. Under the OBBBA, beginning in 2026, only student loan debt that’s forgiven due to the death or total and permanent disability of the student will be excluded from income, but this exclusion is permanent. Warning: Some states may tax forgiven debt that’s excluded for federal tax purposes. Charitable deductions Generally, donations to qualified charities are fully deductible up to certain adjusted gross income (AGI)-based limits if you itemize deductions. The OBBBA creates a nonitemized charitable deduction of up to $1,000, or $2,000 for joint filers, which goes into effect in 2026. Also beginning in 2026, a 0.5% floor will apply to itemized charitable deductions. This generally means that only charitable donations in excess of 0.5% of your AGI will be deductible if you itemize deductions. So, if your AGI is $100,000, your first $500 of charitable donations for the year won’t be deductible. Qualified small business stock Generally, taxpayers selling qualified small business (QSB) stock are allowed to exclude up to 100% of their gain if they’ve held the stock for more than five years. (The exclusion is less for stock acquired before September 28, 2010.) Under pre-OBBBA law, to be a QSB, a business must be engaged in an active trade or business and must not have assets that exceed $50 million, among other requirements. The OBBBA provides new, but smaller exclusions for QSB stock held for shorter periods. Specifically, it provides a 75% exclusion for QSB stock held for four years and a 50% exclusion for QSB stock held for three years. These exclusions go into effect for QSB stock acquired after July 4, 2025. The law also increases the asset ceiling for QSBs to $75 million (adjusted for inflation after 2026) for stock issued after July 4, 2025. Affordable Care Act’s Premium Tax Credits The OBBBA imposes new requirements for Premium Tax Credit (PTC) recipients. For example, beginning in 2028, eligible individuals must annually verify information such as household income, immigration status and place of residence. Previously, many insureds were allowed to automatically re-enroll annually. Beginning in 2026, individuals who receive excess advanced PTCs based on estimated annual income must return the entire excess unless actual income is less than 100% of the federal poverty limit. Currently, individuals with incomes below 400% of the limit are required to make only partial repayments. Temporary tax deductions On the campaign trail in 2024, President Trump promised to eliminate taxes on tips, overtime and Social Security benefits and to make auto loan interest deductible. The OBBBA makes a dent in these promises but doesn’t completely fulfill them. Instead, it creates partial deductions that apply for 2025 through 2028. They’re available to both itemizers and nonitemizers: Tips. Employees and independent contractors generally can claim a deduction of up to $25,000 for qualified tips received if they’re in an occupation that customarily and regularly received tips before 2025. (The eligible occupations will be determined by the IRS and are expected to be released by October 2, 2025.) The tips must be reported on a Form W-2, Form 1099 or other specified statement furnished to the individual or reported directly by the individual on Form 4137. The deduction begins to phase out when a taxpayer’s MAGI exceeds $150,000, or $300,000 for joint filers. Overtime. Qualified overtime pay generally is deductible up to $12,500, or $25,000 for joint filers. It includes only the excess over the regular pay rate. For example, if a taxpayer is normally paid $20 per hour and is paid “time and a half” for overtime, only the extra $10 per hour for overtime counts as qualified overtime pay. The overtime pay must be reported separately on a taxpayer’s W-2 form, Form 1099 or other specified statement furnished to the individual. This deduction also starts phasing out when MAGI exceeds $150,000, or $300,000 for joint filers. Deductible tips and overtime pay remain subject to federal payroll taxes and any applicable state income and payroll taxes. Auto loan interest. Interest on qualified passenger vehicle loans originated after December 31, 2024, generally is deductible up to $10,000, though few vehicles come with that much annual interest. Qualified vehicles include cars, minivans, vans, SUVs, pickup trucks and motorcycles with gross vehicle weight ratings of less than 14,000 pounds that undergo final assembly in the United States. The deduction begins to phase out when MAGI exceeds $100,000, or $200,000 for joint filers. “Senior” deduction. While the OBBBA doesn’t eliminate taxes on Social Security benefits, it does include a new deduction of $6,000 for taxpayers age 65 or older by December 31 of the tax year — regardless of whether they’re receiving Social Security benefits. The deduction begins phasing out when MAGI exceeds $75,000, or $150,000 for joint filers. Social Security benefits, however, are still taxable to the extent that they were before the OBBBA. Finally, be aware that additional rules and limits apply to these new tax breaks. In many cases, the IRS will be publishing additional guidance and will provide transition relief for 2025 to eligible taxpayers and those subject to information reporting requirements. Trump Accounts Beginning in 2026, Trump Accounts will provide families with a new way to build savings for children. An account can be set up for anyone under age 18 at the end of the tax year who has a Social Security number. Annual contributions of up to $5,000 can be made until the year the beneficiary turns age 18. In addition, U.S. citizen children born after December 31, 2024, and before January 1, 2029, with at least one U.S. citizen parent can potentially qualify for an initial $1,000 government-funded deposit. Contributions aren’t deductible, but earnings grow tax-deferred as long as they’re in the account. The account generally must be invested in exchange-traded funds or mutual funds that track the return of a qualified index and meet certain other requirements. Withdrawals generally can’t be taken until the child turns age 18. TCJA provisions The OBBBA also makes permanent many TCJA provisions that were scheduled to expire after 2025, including: Reduced individual income tax rates of 10%, 12%, 22%, 24%, 32%, 35% and 37%, Higher standard deduction (for 2025, the OBBBA also slightly raises the deduction to $15,570 for singles, $23,625 for heads of households and $31,500 for joint filers), The elimination of personal exemptions, Higher alternative minimum tax exemptions, The reduction of the limit on the mortgage debt deduction to the first $750,000 ($375,000 for separate filers) — but the law makes certain mortgage insurance premiums eligible for the deduction after 2025, The elimination of the home equity interest deduction for debt that wouldn’t qualify for the home mortgage interest deduction, such as home equity debt used to pay off credit card debt, The limit of the personal casualty deduction to losses resulting from federally declared disasters — but the OBBBA expands the limit to include certain state-declared disasters, The elimination of miscellaneous itemized deductions (except for eligible unreimbursed educator expenses), and The elimination of the moving expense deduction (except for members of the military and their families in certain circumstances and, beginning in 2026, certain employees or new appointees of the intelligence community). The permanency of these provisions should provide some helpful clarity for tax planning. However, keep in mind that “permanent” simply means that the provisions have no expiration date. It’s still possible that lawmakers could make changes to them in the future. Time to reassess We’ve covered many of the most significant provisions affecting individual taxpayers, but there are other changes that also might affect you. For example, the OBBBA adds a new limitation on itemized deductions for taxpayers in the 37% tax bracket beginning in 2026. It also imposes a new limit on the deduction for gambling losses beginning next year. And sole proprietors and owners of pass-through businesses will also be directly affected by OBBBA tax law changes affecting businesses. Given all of these and other tax law changes, now is a good time to review your tax situation and update your tax planning strategies. Turn to us to help you take full advantage of the new — or newly permanent — tax breaks. © 2025 

Incorporating charitable giving into your estate plan can be a thoughtful and strategic way to support causes you care about while also achieving estate planning objectives. Whether you’re driven by philanthropic goals, legacy planning or financial considerations, planned giving can be an effective tool if you’re seeking to make a lasting impact. You generally have two options for making charitable donations: lifetime gifts or charitable bequests at death. Be aware that each approach has its pros and cons. Lifetime gifts vs. charitable bequests Lifetime gifts allow you to enjoy the fruits of your philanthropic efforts while you’re alive. Charitable bequests, on the other hand, can be a great way to create a legacy. The latter may also be preferable if you’re not comfortable parting with too much of your wealth during your lifetime. From a tax perspective, charitable bequests may have certain advantages over lifetime gifts. When you leave money or property to a qualified charity in your will, your estate may be eligible for an unlimited estate tax charitable deduction. Lifetime gifts, on the other hand, offer both income tax and estate tax benefits. Not only are you entitled to an immediate income tax deduction (subject to applicable limits), but the value of the money or property (plus any future appreciation) is removed from your taxable estate. Of course, estate tax liability is an issue only if the value of your estate will exceed the federal gift and estate tax exemption. For 2025, the exemption amount is $13.99 million. With the passage of the One, Big, Beautiful Bill Act, beginning in 2026, the amount is permanently set at $15 million and will be adjusted annually for inflation. Factor in the estate tax charitable deduction If you wish to make charitable bequests in your will, and estate tax liability is a concern, careful planning is needed to avoid pitfalls that can jeopardize the estate tax charitable deduction. Generally, the gifted assets must be: Included in your gross estate, Transferred by you through your will, and Donated to a qualified charity. If you give your executor or beneficiaries the discretion to distribute assets to charity, those gifts won’t qualify for the estate tax charitable deduction. However, beneficiaries may qualify for an income tax deduction. The charitable bequest must be “ascertainable” at the time of your death; otherwise, the estate tax charitable deduction may be denied. Generally, that means a qualified charitable recipient must be specified in your will. Note: It may be possible to make a bequest to an unnamed charity depending on applicable state law. The amount of the bequest must also be specified. That means your will must leave a certain dollar amount, a specific asset or a percentage of your estate to a charity. It’s also possible to leave the estate’s residue — that is, the amount left after all assets have been distributed to heirs and final expenses have been paid — to a charity. A common pitfall in drafting charitable bequests is the failure to properly identify a qualified charitable recipient. Even if the bequest is correct at the time you draft your will, things can change over time. For example, a charity may change its name, merge with another organization, lose its tax-exempt status or cease to exist. For this reason, name one or more contingent charitable beneficiaries in the event the primary charitable beneficiary can’t accept the donation. To ensure that charitable donations are effectively integrated into your estate plan, contact us. We can review your plan to determine that your intentions are clearly documented, tax-advantaged and legally sound. This not only protects your legacy but also maximizes the benefit to the organizations you care about. © 2025 

For businesses looking to reach the next level of success, there’s no bigger star than organic sales growth. Simply defined, this is achieving an increase in revenue through existing operations rather than from mergers, acquisitions or other external investments. As you’ve likely noticed, coaxing this star into the spotlight isn’t easy. How can you set the stage for organic sales growth? Here are some fundamental ways. It begins with customer service Organic sales growth largely comes from getting more from your current customer base. Accomplishing this feat begins with premier customer service, which means more than just a smile and a handshake. Are your employees really hearing the issues and concerns raised? Do they not only solve problems, but also exceed customers’ expectations whenever possible? The ability to conduct productive dialogues with customers is key to growing sales. Maintaining a positive, ongoing conversation starts with resolving any negative (or potentially negative) issues that arise as quickly as possible under strictly followed protocols. In addition, it includes simply checking in with customers regularly to see what they may need. Marketing counts Boosting sales of any kind, organic or otherwise, inevitably involves marketing. Do you often find yourself wondering why all your channels aren’t generating new leads at the same level? Most likely, it’s because your messaging on some of those channels is no longer connecting with customers and prospects. On a regular basis, you might want to step back and reassess the nature and strengths of your company. Then use this assessment to revise your overall marketing strategy. If you work directly with the buying public, you may want to cast as wide a net as possible. But if you sell to a specific industry or certain types of customers, you could organically grow sales by focusing on professional networking groups, social organizations or trade associations. People matter At the end of the day, organic sales growth is driven by a business’s people. Even the best idea can fail if employees aren’t fully prepared and committed to design, produce, market and sell your products or services. Of course, as you well know, employing talented, industrious staff requires much more than simply getting them to show up for work. First, you must train employees well. This means they need to know how to do their jobs and how to help grow organic sales. You might ask: Does every worker really contribute to revenue gains? In a sense, yes, because everyone from entry-level staff to executives in corner offices drives sales. Second, beyond receiving proper training, employees must be cared for and inspired through valued benefits and a positive work environment. Happy workers are more productive and more likely to preach the excellence of your company’s products or services to friends and family. Organic sales may occur as a result. Star of the show It’s the star of the show for a reason. Organic sales growth is generally considered more sustainable than inorganic revenue gains and a strong indicator of a healthy, competitive business. It also avoids the integration and compliance risks of mergers and acquisitions, not to mention the complications and dangers of acquiring outside financing. We can help you identify your company’s optimal strategies for achieving organic sales growth. © 2025 

As 2025 began, individual taxpayers faced uncertainty with several key provisions of the tax law that were set to expire at the end of the year. That changed on July 4, when President Trump signed the One, Big, Beautiful Bill Act (OBBBA) into law. The OBBBA not only makes many TCJA provisions permanent but also introduces several new benefits — although some other tax breaks have been removed. Below is a summary of eight areas with changes that may impact you and your family. 1. Child tax credit Starting in 2025, the credit rises to $2,200 per qualifying child under 17 (up from $2,000). The refundable portion is set at $1,700 in 2025 and adjusted for inflation thereafter. Phaseouts begin at $200,000 for single taxpayers and $400,000 for joint filers. A valid Social Security number for the child and at least one parent is required to claim the credit. 2. Credit for other dependents The OBBBA retains the $500 credit for non-child dependents and makes it permanent. This applies to children who are too old to qualify for the child tax credit or elderly parents. This credit, also subject to the child tax credit phaseout rules, was set to expire after 2025. 3. Tax rates and brackets The seven tax brackets introduced by the Tax Cuts and Jobs Act (TCJA) were set to expire after 2025. The OBBBA makes these rates — 10%, 12%, 22%, 24%, 32%, 35% and 37% — permanent, with inflation-adjusted bracket thresholds beginning in 2026. There are no changes to long-term capital gains and qualified dividends. They’ll remain taxed at 0%, 15%, or 20%. Real estate depreciation-related gains will still be taxed at up to 25%, and long-term gains on collectibles will still be taxed at 28%. 4. Increased standard deduction The TCJA nearly doubled standard deduction amounts, and the OBBBA solidifies these increases starting in 2025 for taxpayers filing as: Single, $15,750 (up from $15,000 before the law), Head of household, $23,625 (up from $22,500), and Married filing jointly, $31,500 (up from $30,000). These figures will be adjusted for inflation from 2026 onward. Additional deductions are still available for those age 65 or older or blind. They are $2,000 for single individuals and $1,600 per spouse for married couples filing jointly. 5. New senior deduction For tax years 2025–2028, a new senior deduction of up to $6,000 is available to individuals age 65 or older, regardless of whether they itemize. The total deduction can be up to $12,000 for joint filers where both spouses are eligible. The deduction begins to phase out when modified adjusted gross income (MAGI) exceeds $75,000 for singles or $150,000 for joint filers. It phases out completely at MAGI of $175,000 and $250,000, respectively. 6. SALT deduction cap The deduction limit for state and local taxes (SALT) is raised temporarily. For 2025, it’s increased to $40,000 ($20,000 if married filing separately). For 2026, the deduction limit rises to $40,400 and increases by one percent over the previous year’s amount in 2027–2029. The SALT deduction limit will return to $10,000 in 2030. The deduction is phased out for higher-income taxpayers. The phaseout begins at MAGI of $500,000 for married couples filing jointly ($250,000 for singles and married individuals filing separately). 7. Estate and gift tax exemption The lifetime estate and gift tax exemption, which is $13.99 million in 2025, will rise to $15 million in 2026 and be adjusted annually for inflation. For married couples, that’s an effective exemption of $30 million in 2026 and beyond. 8. Qualified passenger vehicle loan interest For tax years 2025–2028, taxpayers can claim a new deduction of up to $10,000 for interest paid or accrued on a loan for the purchase of a qualified passenger vehicle for personal use. There are a number of requirements to claim the deduction, including that the final assembly of the vehicle must occur in the United States. The deduction begins to phase out when the taxpayer’s MAGI exceeds $100,000 ($200,000 for married couples filing jointly). The tax break is also available to individuals who don’t itemize deductions on their tax returns. Wide-ranging impacts These are just some of the provisions in the massive new tax law. It marks a substantial shift in tax policy, locking in many benefits from the TCJA while introducing some new tax breaks. However, keep in mind that some provisions — like the SALT deduction increase — are temporary and others contain income-based limitations. Contact us if you have questions about how these changes affect your personal situation. © 2025 

The One, Big, Beautiful Bill Act (OBBBA) was signed into law on July 4. The new law includes a number of favorable changes that will affect small business taxpayers, and some unfavorable changes too. Here’s a quick summary of some of the most important provisions. First-year bonus depreciation The OBBBA permanently restores the 100% first-year depreciation deduction for eligible assets acquired after January 19, 2025. This is up from the 40% bonus depreciation rate for most eligible assets before the OBBBA. First-year depreciation for qualified production property The law allows additional 100% first-year depreciation for the tax basis of qualified production property, which generally means nonresidential real property used in manufacturing. This favorable deal applies to qualified production property when the construction begins after January 19, 2025, and before 2029. The property must be placed in service in the United States or one of its possessions. Section 179 expensing For eligible assets placed in service in taxable years beginning in 2025, the OBBBA increases the maximum amount that can be immediately written off to $2.5 million (up from $1.25 million before the new law). A phase-out rule reduces the maximum deduction if, during the year, the taxpayer places in service eligible assets in excess of $4 million (up from $3.13 million). These amounts will be adjusted annually for inflation starting in 2026. R&E expenditures The OBBBA allows taxpayers to immediately deduct eligible domestic research and experimental expenditures that are paid or incurred beginning in 2025 (reduced by any credit claimed for those expenses for increasing research activities). Before the law was enacted, those expenditures had to be amortized over five years. Small business taxpayers can generally apply the new immediate deduction rule retroactively to tax years beginning after 2021. Taxpayers that made R&E expenditures from 2022–2024 can elect to write off the remaining unamortized amount of those expenditures over a one- or two-year period starting with the first taxable year, beginning in 2025. Business interest expense For tax years after 2024, the OBBBA permanently restores a more favorable limitation rule for determining the amount of deductible business interest expense. Specifically, the law increases the cap on the business interest deduction by excluding depreciation, amortization and depletion when calculating the taxpayer’s adjusted taxable income (ATI) for the year. This change generally increases ATI, allowing taxpayers to deduct more business interest expense. Qualified small business stock Eligible gains from selling qualified small business stock (QSBS) can be 100% tax-free thanks to a gain exclusion rule. However, the stock must be held for at least five years and other eligibility rules apply. The new law liberalizes the eligibility rules and allows a 50% gain exclusion for QSBS that’s held for at least three years, a 75% gain exclusion for QSBS held for at least four years, and a 100% gain exclusion for QSBS held for at least five years. These favorable changes generally apply to QSBS issued after July 4, 2025. Excess business losses The OBBBA makes permanent an unfavorable provision that disallows excess business losses incurred by noncorporate taxpayers. Before the new law, this provision was scheduled to expire after 2028. Paid family and medical leave The law makes permanent the employer credit for paid family and medical leave (FML). It allows employers to claim credits for paid FML insurance premiums or wages and makes other changes. Before the OBBBA, the credit was set to expire after 2025. Employer-provided child care Starting in 2026, the OBBBA increases the percentage of qualified child care expenses that can be taken into account for purposes of claiming the credit for employer-provided child care. The credit for qualified expenses is increased from 25% to 40% (50% for eligible small businesses). The maximum credit is increased from $150,000 to $500,000 per year ($600,000 for eligible small businesses). After 2026, these amounts will be adjusted annually for inflation. Termination of clean-energy tax incentives The OBBBA terminates a host of energy-related business tax incentives including: • The qualified commercial clean vehicle credit, effective after September 30, 2025. • The alternative fuel vehicle refueling property credit, effective after June 30, 2026. • The energy efficient commercial buildings deduction, effective for property the construction of which begins after June 30, 2026. • The new energy efficient home credit, effective for homes sold or rented after June 30, 2026. • The clean hydrogen production credit, effective after December 31, 2027. • The sustainable aviation fuel credit, effective after September 30, 2025. More to come In the coming months, the IRS will likely issue guidance on these and other provisions in the new law. We’ll keep you updated, but don’t hesitate to contact us for assistance in your situation. © 2025

The One, Big, Beautiful Bill Act (OBBBA) includes numerous provisions affecting the tax liability of U.S. businesses. For many businesses, the favorable provisions outweigh the unfavorable, but both kinds are likely to impact your tax planning. Here are several provisions included in the new law that may influence your business’s tax liability. Qualified business income (QBI) deduction The Tax Cuts and Jobs Act (TCJA) created the Section 199A deduction for QBI for owners of pass-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships. The deduction had been slated to expire after 2025, putting many business owners at risk of higher taxes. The OBBBA makes the QBI deduction permanent. It also expands the deduction limit phase-in ranges for specified services, trades or businesses, and other entities subject to the wage and investment limitation. For these businesses, the deduction is reduced when taxable income falls within the phase-in range and is eliminated when taxable income exceeds the range. The new law expands the phase-in thresholds from $50,000 to $75,000 for individual filers and from $100,000 to $150,000 for joint filers. The OBBBA also adds an inflation-adjusted minimum QBI deduction of $400, beginning in 2025. It’s available for taxpayers with at least $1,000 of QBI from one or more active businesses in which they materially participate. Accelerated bonus depreciation The OBBBA makes permanent 100% first-year bonus depreciation for the cost of qualified new and used assets acquired and placed into service after January 19, 2025. Under the TCJA, the deduction was limited to 40% for 2025, 20% in 2026 and 0% in 2027. The new law also introduces a 100% deduction for the cost of “qualified production property” (generally, nonresidential real property used in manufacturing) placed into service after July 4, 2025, and before 2031. In addition, the OBBBA increases the Sec. 179 expensing limit to $2.5 million and the expensing phaseout threshold to $4 million for 2025, with each amount adjusted annually for inflation. Together, the depreciation changes are expected to encourage capital investments, especially by manufacturing, construction, agriculture and real estate businesses. And the permanent 100% bonus depreciation may alleviate the pressure on companies that didn’t want to delay purchases due to a smaller deduction. Research and experimentation expense deduction Beginning in 2022, the TCJA required businesses to amortize Sec. 174 research and experimentation (R&E) costs over five years if incurred in the United States or 15 years if incurred outside the country. With the mandatory mid-year convention, deductions were spread out over six years. The OBBBA permanently allows the deduction of domestic R&E expenses in the year incurred, starting with the 2025 tax year. The OBBBA also allows “small businesses” (those with average annual gross receipts of $31 million or less) to claim the deduction retroactively to 2022. Any business that incurred domestic R&E expenses in 2022 through 2024 can elect to accelerate the remaining deductions for those expenditures over a one- or two-year period. Clean energy tax incentives The OBBBA eliminates many of the Inflation Reduction Act’s clean energy tax incentives for businesses, including the: Qualified commercial clean vehicle credit, Alternative fuel vehicle refueling property credit, and Sec. 179D deduction for energy-efficient commercial buildings. The law accelerates the phaseouts of some incentives and moves up the project deadlines for others. The expiration dates vary. For example, the commercial clean vehicle credit can’t be claimed for a vehicle acquired after September 30, 2025, instead of December 31, 2032. But the alternative fuel vehicle refueling property credit doesn’t expire until after June 30, 2026. Qualified Opportunity Zones The TCJA established the Quality Opportunity Zone (QOZ) program to encourage investment in distressed areas. The program generally allows taxpayers to defer, reduce or exclude unrealized capital gains reinvested in qualified opportunity funds (QOFs) that invest in designated distressed communities. The OBBBA creates a permanent QOZ policy that builds off the original program. It retains the existing benefits and also provides for investors to receive incremental reductions in gain starting on their investment’s first anniversary. In the seventh year, taxpayers must realize their initial gains, reduced by any step-up in basis, the amount of which depends on how long the investment is held. The first round of QOFs available under the permanent policy will begin on January 1, 2027. The OBBBA also introduces a new type of QOF for rural areas. Investments in such funds will receive triple the step-up in basis. International taxes The TCJA added several international tax provisions to the tax code, including deductions for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). It also established the base erosion and anti-abuse tax (BEAT) on U.S. corporations that 1) have average annual gross receipts greater than or equal to $500 million for the prior three tax years, and 2) have made deductible payments to related non-U.S. parties at or above 3% of all deductible payments. The OBBBA makes permanent the FDII and GILTI deductions and adjusts the effective tax rates for FDII and GILTI to 14%. It also makes permanent the minimum BEAT, increasing the tax rate to 10.5%. These changes take effect beginning in 2026. Employer tax provisions The new law makes permanent the exclusion from gross income (for employees) and from wages for employment tax purposes (for employers) for employer payments of student loans. It also provides that the maximum annual exclusion of $5,250 be adjusted annually for inflation after 2026. In addition, the OBBBA permanently raises the maximum employer-provided child care credit from 25% to 40% of qualified expenses, up to $500,000 per year. (For eligible small businesses, these amounts are 50% and up to $600,000, respectively.) The maximum dollar amount will be adjusted annually for inflation after 2026. The OBBBA also makes permanent the employer credit for paid family and medical leave (FML) after 2025. Employers will also be allowed to claim the credit for a portion of premiums for paid FML insurance. Employee Retention Tax Credit If you filed an Employee Retention Tax Credit claim after January 31, 2024, you may not see your expected refund. The OBBBA bars the IRS from issuing refunds for certain claims submitted after that date. It also gives the IRS at least six years from the date of filing to challenge these claims. Miscellaneous provisions The OBBBA increases the limit on the business interest deduction by excluding depreciation, amortization and depletion from the computation of adjusted taxable income (ATI), starting in 2025. The deduction is generally limited to 30% of ATI for the year. The new law also makes permanent the excess business loss limit, which was set to expire in 2029. And it permanently extends the New Markets Tax Credit, which was scheduled to expire in 2026. What’s next? Since the OBBBA is simply extending or making relatively modest modifications to existing tax law, it probably won’t result in the years-long onslaught of new regulations and IRS guidance that followed the TCJA’s enactment. But we’ll keep you informed about any new developments. © 2025