New Tax Laws

1. Key Individual & Family Tax Provisions
Permanent 2017 Tax Cuts:

• The individual income tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) were set to expire after Dec 31, 2025. This bill makes them permanent, including:
  • Lowered top marginal rates (keeps 37% top bracket instead of reverting to ~39.6%)
  • Higher standard deduction
  • Doubled estate tax exemption stays ($12.92M per person indexed to inflation)
• 100% bonus depreciation, which was part of the original 2017 Tax Cuts and Jobs Act (TCJA), had already started phasing down:
  • 2023: 80%
  • 2024: 60%
  • 2025: 40% (without changes, it would continue phasing down and end after 2026).
• The new bill restores bonus depreciation to 100% through 2027 for qualifying property placed in service (mainly machinery, equipment, certain improvements).
• Then it phases down again:
  • 80% in 2028
  • 60% in 2029
  • 40% in 2030
  • Fully sunsets in 2031, unless extended again.

• Tips (restaurant, bar, gig workers) would be 100% tax-free  (25k cap), as would overtime pay up to a certain limit ($12,500 per year per taxpayer).
• Auto loan interest deductibility returns — up to $5,000/year can be deducted.

• Increased from $2,000 to $2,500 per child through 2028, then reverts to $2,000.
• Keeps partially refundable provisions.

• Standard deduction for seniors boosted by ~$5,000.
• New $1,000 “Senior Caregiver Credit” if you care for an elderly relative in your home.

• Parents can open a special tax-free “Trump Account” for each child — up to $5,000/year in contributions, grows tax-free, can be used for child education, first home purchase, or medical expenses.

• Raises State and Local Tax deduction cap to $40K for married couples, $20K single — up from $10K now.

• Adjusts brackets to reduce the “marriage penalty” for middle-income joint filers.

• Keeps the 21% rate from the TCJA (was set to rise to ~28% under some previous proposals).

• Keeps the 20% deduction for pass-through business income (e.g., LLCs, partnerships) permanently.

• New “America First Manufacturing Deduction” for domestic manufacturers — 10% credit for wages paid to US workers.

• Introduces a 5% tax on remittances sent abroad from the US by foreign nationals.

• New surtax on university endowments over $5 billion.
• Authorizes IRS to revoke tax-exempt status of nonprofits linked to terror or human trafficking.

• Passed Senate 50–50; VP Vance broke the tie.
• Heads to the House, where a slim GOP majority will need to reconcile differences with more moderate members.