Giving feels good — but now it needs to be just a bit more generous to get you a write-off. Sec. 70425. 0.5 percent floor on deduction of contributions made by individuals. Charitable deductions by individuals are only allowed if they exceed 0.5% of their adjusted gross income (AGI). Application: A taxpayer with $100,000 in AGI must donate more than $500 before any of it is deductible.

Imagine getting $4,400 back just for raising your kids — this change puts money back in parents’ pockets when it’s needed most. Sec. 70104. Extension and enhancement of increased child tax credit. The Child Tax Credit is now $2,200 per child starting in 2025 and will be adjusted annually for inflation. It also makes permanent the $2,000 base credit introduced in 2018. Application: A family with two children under 17 could receive up to $4,400 in credits on their 2025 return. This directly reduces the taxes they owe or increases their refund.

If tragedy strikes, you or your family won't face a surprise tax bill on canceled student loans. Sec. 70119. Extension and modification of exclusion from gross income of student loans discharged on account of death or disability. Makes permanent the exclusion from taxable income for student loans forgiven due to death or permanent disability. Application: A parent who cosigned a student loan for their child won’t be taxed on the forgiven balance if the child passes away.

Your 20% business deduction is here to stay and has an increase to 23% — lock in your tax planning with confidence. Sec. 70105. Extension and enhancement of deduction for qualified business income. The 20% Qualified Business Income (QBI) deduction is now permanent for eligible sole proprietors, partnerships, and S corporations. Application: A self-employed consultant earning $100,000 in profit can deduct $20,000 under this rule, lowering taxable income to $80,000.

Expanding your business? You’ll get a major upfront deduction on equipment — save money now, grow faster. Sec. 70306. Increased dollar limitations for expensing of certain depreciable business assets. Section 179 deduction limit increases to $2.5 million, with a phase-out beginning at $4 million. This means businesses can expense more upfront. Application: A business that purchases $2 million in new office equipment can deduct the full amount in the year of purchase, reducing taxable income.

Finally — some relief from the SALT cap. But act now, it may not last forever. H.R.1 Sec. 70120. Limitation on individual deductions for certain state and local taxes, etc. Raises the SALT deduction cap to $40,000 for most taxpayers from 2025–2029, then set to revert to $10,000 in 2030. Application: A couple in a high-tax state can deduct more property and income taxes for a few years, reducing taxable income.

Struggling with childcare costs? This credit could mean thousands back in your pocket next spring. Sec. 70405. Enhancement of child and dependent care tax credit. The child and dependent care credit now covers up to 50% of qualifying expenses, with higher income thresholds before phaseout. Application: A dual-income family earning $60,000 and paying $6,000 for child care can receive a $3,000 tax credit in 2026.

Show your employees you care and get rewarded — tax credits for paid leave are now permanent. Sec. 70304. Extension and enhancement of paid family and medical leave credit. Makes the tax credit for employers who provide paid family and medical leave permanent and more generous. Application: A small business offering paid maternity leave can claim a tax credit to help offset wage costs. Note that this can't be used in conjunction with a state PFML program.

Servers and bartenders will finally keep all their tips without IRS taking a bite. Sec. 70201. No tax on tips. Up to $25,000 in tips are no longer considered taxable income for employees starting in 2025. Application: A server at a restaurant who earns $10,000 in tips during the year will no longer owe federal income tax on that money. Note that income thresholds apply.

That new app or product you’re working on? All those development costs can now lower your taxes this year. Sec. 70302. Full expensing of domestic research and experimental expenditures. Businesses can fully deduct costs related to domestic research and development (R&D) instead of amortizing over several years. Application: A software company developing a new app can deduct all related developer wages and testing costs in 2025 instead of spreading them out.

Drivers paying off auto loans now get a break — deducting interest saves real cash. Sec. 70203. No tax on car loan interest. Interest paid on personal car loans, incurred after 12/31/2024, is now deductible starting in 2025. Application: A taxpayer who pays $2,000 in auto loan interest in 2025 can deduct that amount on their 2025 tax return, reducing their taxable income.

That holiday overtime grind? The reward just got sweeter — no tax owed on those extra hours. Sec. 70102. No tax on overtime. Income earned from overtime hours will not be taxed starting in 2025. Application: An employee who works extra shifts and earns $5,000 in overtime pay will see a full $5,000 added to their paycheck without income tax withholding. Note, that if the overtime is paid at time and a half, only the "half" is deductible.

You can still pass your business or farm to the next generation tax-free — the rules stay favorable. Sec. 70106. Extension and enhancement of increased estate and gift tax exemption amounts. Keeps the higher estate and gift tax exemption limits in place beyond 2025, preserving the ability to transfer more wealth tax-free. Application: An individual can continue gifting or leaving over $13 million without triggering federal estate tax liability.

If you're building a U.S. business making major purchases, you’ll be rewarded at tax time with full write-offs. Sec. 70301. Full expensing for certain business property. Businesses can now permanently deduct 100% of the cost of qualifying property (like equipment or machinery) in the year it’s placed in service. Application: A construction company that buys a $75,000 excavator in 2025 can deduct the full cost that year instead of spreading it over several years.

Interest from big equipment loans can now be fully deducted — great news for growing firms. Sec. 70303. Modification of limitation on business interest. Changes the way businesses calculate limits on interest deductions, potentially allowing more interest expense to be deducted. Application: A small business with a large equipment loan may be able to deduct more of its interest costs, lowering its taxable income.

You may no longer deduct what you pay for advice or dues — plan accordingly. Sec. 70110. Termination of miscellaneous itemized deductions other than educator expenses. All miscellaneous itemized deductions, except those for teachers’ classroom expenses, are permanently eliminated. Application: A retiree who used to deduct investment advisor fees or union dues can no longer claim those expenses starting in 2025.

Paying down student loans just got easier with tax-free employer help. Sec. 70412. Exclusion for employer payments of student loans. Employers can make tax-free student loan payments up to $5,250 per year on behalf of employees. Application: An employer who helps an employee repay student loans won’t owe payroll taxes on those payments, and the employee avoids income tax on that amount.

If you're building a U.S. business making major purchases, you’ll be rewarded at tax time with full write-offs. Sec. 70301. Full expensing for certain business property. Businesses can now permanently deduct 100% of the cost of qualifying property (like equipment or machinery) in the year it’s placed in service. Application: A construction company that buys a $75,000 excavator in 2025 can deduct the full cost that year instead of spreading it over several years.

Your Etsy or eBay sales may not trigger a tax form — less stress for side hustlers everywhere. Sec. 70432. Repeal of revision to de minimis rules for third-party network transactions. Restores the old rule that third-party payment platforms like Venmo or PayPal only report income over $20,000 and more than 200 transactions per year. Application: An Etsy seller who made $5,000 over 100 transactions in 2025 will not receive a 1099-K and may avoid IRS scrutiny for small side hustles.

You might skip 1099s for your smaller contractors — less admin and fewer headaches. Sec. 70433. Increase in threshold for requiring information reporting with respect to certain payees. Raises the 1099-NEC and 1099-MISC reporting threshold from $600 to $2,000 starting in 2026. Application: A business that pays a contractor $1,800 in 2026 will no longer be required to issue a 1099-NEC.