If you’ve heard people buzzing about a new tax bill – yep, it’s finally here. The draft version of the new Ways & Means tax proposal just dropped, and it’s a big one.
Is it official yet? Nope. It still has a long way to go (House → Senate → probably back to the House).
But it’s worth digging into the new tax proposal and what’s in this first version, especially if you own a business, invest in real estate, or just want to know if you’re getting any tax breaks this year.
We’ve gone through the fine print so you don’t have to. Here’s the simple breakdown.
If you’ve bought a building, equipment, or other big stuff for your business, this one’s for you: the 100% bonus depreciation is coming back for four years. That means you might be able to write off the full cost of certain purchases right away instead of spreading it over years.
But here’s the catch: it only works for stuff you bought after January 19, 2025. And it has to be placed in service (aka, up and running) to count. So don’t assume everything qualifies. Talk to your CPA before making big moves.
You might’ve heard about the $10,000 SALT deduction cap. It’s the limit on how much state and local tax you can write off.
The new bill bumps that cap up to $30,000, which sounds nice… but don’t get too excited. Many Republicans already walked away from this change, so it’s likely to get chopped, tweaked, or erased altogether before anything becomes law.
If your business loses money, you’ve probably heard about Excess Business Losses (EBLs). Right now, you can turn those losses into Net Operating Losses (NOLs), which help offset future income.
But under the new proposal? You’d have to roll those losses into your taxes the very next year. This might not sound like a big deal, but it changes a lot behind the scenes when it comes to strategy and tax planning.
Good news for small business owners: the Qualified Business Income (QBI) deduction is going up from 20% to 23%. That means a bigger deduction for eligible businesses.
However… there’s no corporate tax rate cut in this version of the bill. And the rules around service businesses (like law firms, accounting firms, etc.) are still a bit murky.
If you do research and development, you’ve probably been frustrated with recent changes to Section 174. Well, it’s back to being deductible—and extended through 2030.
But, and this is important: it’s not retroactive. So expenses from 2022–2024? Still stuck in limbo.
Manufacturers get a big win here. The gross receipts cap for using cash accounting and other tax-friendly methods is being raised to $80 million (it’s around $25–30M for most others). That opens the door to some major benefits if you’re in manufacturing.
Some states came up with clever ways to get around the SALT cap using something called PTET (Pass-Through Entity Tax) elections.
This bill? It kills that workaround and throws out Notice 2020-75 entirely. If you were using this trick, it might be time to rethink your strategy.
The bill adds some oddball deductions, including:
Weird? Yes. Final rules will probably change.
Retirees, take note: you might be able to deduct up to $4,000 of your Social Security income. This is basically a sneaky way to lower taxes on SS benefits without changing the actual rules (since Social Security can’t be touched in a budget bill).
If you bought a car for your business and took out a loan, this could be helpful. You’d get a $10,000 deduction for interest paid—but only for four years. And only if it’s actually a business-use vehicle.
Another big one for small businesses: the Section 179 expensing limit jumps to $2.5 million. That means more immediate write-offs for equipment, furniture, etc. The phaseout kicks in at $4 million.
Parents will love this:
There’s also a new thing called “MAGA Accounts”, which are savings accounts for kids born after 2025. The government chips in $1,000 to start, and parents can add up to $4,000/year. These end after 2029.
Good news if you’re a gym rat (or want to be): HSA funds can now be used for gym memberships.
This is just a draft.
None of it is law yet. Expect more changes, debates, and probably some back-and-forth battles in Congress.
But if even half of this stuff sticks, it could change a lot about how you run your business, save for your kids, or plan your taxes in the next few years.
That’s where we come in. At Adam Traywick, we help clients cut through the chaos and stay ahead of tax law changes, without the jargon.
👉 Reach out anytime if you’ve got questions or want to plan ahead. We’re happy to help.
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