Key Tax Provisions Made Permanent

Tax Brackets
The 2017 tax cuts are now permanent. Without this bill, rates would have increased in 2026. Here’s what’s staying:

• 12%, 22%, 24%, 32%, and 37%
  No return to the higher pre-2017 rates.

Standard Deduction
The increased standard deduction is also made permanent and will be:

• $15,750 for single filers
• $23,625 for heads of household
• $31,500 for married couples filing jointly (effective 2025, adjusted annually for inflation)

Qualified Business Income Deduction
The 20% QBI deduction is now permanent. The phase-out thresholds for certain businesses have increased, allowing more filers to benefit.

Estate and Gift Tax Exemption
The exemption increases to $15 million in 2026 and will continue to adjust for inflation.

New or Expanded Tax Breaks

Senior Deduction
Starting in 2025, a $6,000 deduction is available for individuals age 65+, though it phases out above $75,000 in income ($150,000 for joint filers).

Child Tax Credit
Increases from $2,000 to $2,200 in 2025, with future adjustments tied to inflation.

Charitable Giving
Beginning in 2026, filers may deduct up to $1,000 (or $2,000 for married couples) in charitable donations even if they don’t itemize.

Overtime Pay and Tip Income
From 2025 through 2028, workers may deduct:

• Up to $25,000 in tip income
• Up to $12,500 in overtime pay (or $25,000 if married)
  Both deductions are subject to income phaseouts.

Car Loan Interest Deduction
Up to $10,000 in car loan interest may be deductible from 2025 to 2028, provided the vehicle was assembled in the U.S. and income falls below a certain threshold.

Dependent Care & 529 Plans

• Dependent Care FSA limit increases to $7,500
• 529 plans may now be used for K-12 tuition, books, and career certifications (starting in 2026)

“Trump Account” for Minors
A new tax-advantaged investment account for children under 18. Annual contributions capped at $5,000. No early withdrawals allowed.

Provisions Being Phased Out or Repealed

Gambling Losses
Beginning in 2026, only 90% of gambling losses may be deducted—and only up to the amount of gambling winnings.

1099-K Threshold Restored
The $600 reporting threshold has been repealed. Starting in 2025, the threshold will revert to $20,000 and 200 transactions.

Clean Energy Tax Credits Ending
Federal credits for new and used electric vehicles, energy-efficient home improvements, and residential clean energy systems will all expire by the end of 2025.

Additional Notables

• Opportunity Zone incentives have been made permanent starting in 2027.
• A new deduction schedule has been created for Qualified Small Business Stock (QSBS), reducing the required holding period from 5 years to 3 years.
• A modified “Pease Limitation” returns in 2026, reducing itemized deductions for high earners.