I hope this message finds you well! As your accountant, I want to share some important updates about tax laws that may affect you. Here’s a breakdown of the updates simplified for easy understanding:
OBBBA, Car Loan Interest Deduction:
This means you might be able to deduct (take off) some of the interest you pay on your car loan from your taxes. This can help reduce how much money you owe.
OBBBA, Enhancement of Child and Dependent Care Tax Credit:
If you pay for childcare or help for a dependent (like a disabled child), this law has made the tax credit bigger. This means you can get more money back on your taxes to help cover those costs.
OBBBA, Enhancement of Adoption Credit:
When you adopt a child, there are costs involved. This update increases the amount of money you can get back on your taxes for those expenses, making it a little easier to afford.
OBBBA, Social Security Number Requirement for American Opportunity and Lifetime Learning Credit:
When you want to claim credits for education, like college, everyone needs to have a Social Security Number. This rule makes sure everything is in order before you receive your tax benefits.
OBBBA, Termination of Energy Efficient Home Improvement Credit:
If you made energy-saving upgrades to your home, you used to get a tax break for that. Unfortunately, this credit is now gone, so you won’t get money back for those improvements anymore.
OBBBA, Termination of Residential Clean Energy Credit:
Similar to the previous point, if you installed solar panels or other clean energy features in your home, you won’t receive a tax credit for these investments anymore.
OBBBA, Termination of Previously Owned Clean Vehicle Credit:
There used to be a tax advantage for buying used clean cars. But this credit has been removed, meaning no tax break for those purchases now.
OBBBA, Tax Credit for Contributions of Individual to Scholarship Granting Organization:
If you make donations to organizations that give scholarships to students, you can get a tax credit. This helps support education and can lower your tax owed.
OBBBA, Termination of Clean Vehicle Credit:
This is about new clean cars (like electric ones). If you were hoping to receive a tax credit for buying one, this credit is no longer available.
OBBBA, Termination of New Energy Efficient Home Credit:
This means that if you built or bought a new house that saves energy, you won’t get a tax break for that anymore.
OBBBA, Extension and Enhancement of Increased Standard Deduction:
The standard deduction, which lowers the amount of your income that's taxed, has been increased. This is good news because it can mean you owe less in taxes. Single $15,750; Married Filing Jointly $31,500; Head of Household $ 23,625.00
OBBBA, Extension and Modification on Limitation on Deduction for Qualified Residence Interest:
This law talks about how much interest you can deduct from your taxes if you take a loan for your home. There are new limits on this, so please check if it affects you.
OBBBA, Limitation on Individual Deductions for Certain State and Local Taxes
: You can only deduct a certain amount of state and local taxes from your income when filing your taxes. This law has set some limits on that deduction.
OBBBA, 0.5% Floor on Deduction of Contributions Made by Individuals
: This means if you donate money (charitable contributions), there's now a minimum percentage that you can deduct from your taxes.
OBBBA, Permanent and Expanded Reinstatement of Partial Deduction for Charitable Contributions of Individuals Who Do Not Elect to Itemize
: Even if you don’t list out your deductions (itemize), you can still partially deduct donations you made to charities. This is a permanent change!
OBBBA, No Tax on Tips:
When you receive tips (like money from customers in the service industry), you won't be taxed on some amounts. This will help you keep more of the money you earn.
OBBBA, No Tax on Overtime:
If you work extra hours and get paid more (overtime), you won’t have to pay taxes on that extra pay. This helps you take home more money!
OBBBA, Social Security Taxability Thresholds:
if you are single taxpayer and earn $25,000 or less 0 benefits gets taxed, $25,000 to $34,000 up to 50% of benefits gets taxed, More than $34,000 up to 85% of your benefits get’s taxed, for married filing jointly the amounts differ.
Not OBBBA, but new in the works for everyone, Online Account
: you can create an account to view your tax information. Make sure to set this up, and check it every year to stay updated with your taxes or notices, feature is available via
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If you have any questions about how these changes might affect you, feel free to reach out. It’s important to stay informed! Our phone number 630-881-4679