Latest news with #CPAs
Yahoo
17-07-2025
- Automotive
- Yahoo
'One Big Beautiful Bill' offers Americans lots of tax benefits. Here are a few to plan for
Tax season isn't close to opening yet, but now is the time to start planning to take advantage of new provisions in the massive tax and spending bill that became law earlier in July, experts say. No tax on tips and overtime and the $6,000 bonus deduction for seniors have been well publicized, but there's much more that can change your taxes. Other highlights include charitable contributions deductions, auto loan interest deduction for certain new vehicles and increased deductions and credits for families. 'Everyday taxpayers who received the standard deduction had no tax planning opportunities under the 2017 TCJA (Tax Cuts and Jobs Act),' said Brian Gray, certified public accountant and tax partner at Gursey Schneide. Now, there are many. Charitable contributions are no longer just for itemizers OBBB permanently brings back a charitable contributions deduction for those who take the standard deduction beginning in 2026. During the pandemic in 2020, the CARES Act allowed a temporary deduction of up to $300 for cash donations for individuals taking the standard deduction. The temporary deduction was extended and expanded to $600 for married couples filing jointly for 2021 and then expired. Under OBBB, 'year-end charitable deduction planning could be beneficial,' Gray said. 'You can deduct $1,000 per person, or $2,000 per couple, in above-the-line charitable contribution deductions if you cannot itemize.' An above-the-line deduction can be taken without itemizing. It's valuable because it lowers your adjusted gross income, which lowers your tax liability and may help you qualify for other deductions or tax credits. Interest deduction on personal auto loans OBBB has made new personal auto loan interest deductible for non-itemizers for the first time ever, said Brian Schultz, certified public accountant in Plante Moran Wealth Management's tax practice. Personal auto loan interest used to be deductible but only as an itemized deduction until the Tax Reform Act of 1986 eliminated it. Under OBBB, Americans can deduct up to $10,000 of interest on their taxes, beginning in 2025 through 2028. There are specific requirements to qualify for the deduction that could make it harder to take advantage of, some warn. For example, the purchase must be a new, U.S.-assembled vehicle for personal use, and income limitations apply. However, if you can find a qualified car and are eligible for the deduction, the calculus could change when deciding whether to buy or lease a car and how much each cost, Schultz said. More benefits for families There are two benefits families should be aware of even if they take the standard deduction, Schultz said. If your employer offers a higher Dependent Care Flexible Spending Account (DCFSA). Funds are withdrawn from your paycheck before taxes are deducted and can generally be used for care for a child or adult unable to care for themselves. The OBBB permanently increases the annual maximum contribution to $7,500 (or $3,750 for married couples filing separately) from $5,000. Though the increase begins next year, enrollment in these plans starts soon in 2025, Schultz said. Other than a temporary increase during COVID to $10,500, (or $5,250 for married individuals filing separately) in 2021 from the American Rescue Plan Act, the contribution level had been stuck at $5,000 for 40 years, according to insurance brokerage Newfront. The Child and Dependent Care Credit (CDCC) gets a double boost, starting in 2026, Schultz said. First, the credit rate increased to 50% from 35% of qualifying expenses, up to $3,000 for one child and up to $6,000 for two or more children, for families with the lowest incomes. There isn't an income ceiling, but the percentage gradually decreases as income rises. Second, the way the new credit rate phases down for taxpayers, the income threshold to receive the lowest 20% credit has jumped to $206,000 for a married couple filing jointly and $103,000 for individuals from pre-OBBB income levels of $86,000 and $43,000, respectively. These changes will result in nearly 4 million families seeing an increased tax credit, according to First Five Years Fund, a nonprofit focused on ensuring families have affordable access to quality child care and early learning programs. 'Under current law, a family with two young children making less than $150,000 typically receives around $1,200,' said Sarah Rittling, the organization's executive director, in a statement after Congress passed the OBBB. With the 'enhancements, that benefit would see a $900 boost that can make a meaningful difference for parents managing tight budgets.' With some planning, Americans may also be able to score a larger credit, Schulz said. For example, boosting a 401(k) contribution could reduce your taxable income enough to pick up a larger CDCC in 2026. 'A lot of new changes with income phaseouts,' he said. 'Be mindful of income levels.' Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday. This article originally appeared on USA TODAY: Plan now for these 'One Big Beautiful Bill' tax benefits, experts say Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17-07-2025
- Automotive
- Yahoo
'One Big Beautiful Bill' offers Americans lots of tax benefits. Here are a few to plan for
Tax season isn't close to opening yet, but now is the time to start planning to take advantage of new provisions in the massive tax and spending bill that became law earlier in July, experts say. No tax on tips and overtime and the $6,000 bonus deduction for seniors have been well publicized, but there's much more that can change your taxes. Other highlights include charitable contributions deductions, auto loan interest deduction for certain new vehicles and increased deductions and credits for families. 'Everyday taxpayers who received the standard deduction had no tax planning opportunities under the 2017 TCJA (Tax Cuts and Jobs Act),' said Brian Gray, certified public accountant and tax partner at Gursey Schneide. Now, there are many. Charitable contributions are no longer just for itemizers OBBB permanently brings back a charitable contributions deduction for those who take the standard deduction beginning in 2026. During the pandemic in 2020, the CARES Act allowed a temporary deduction of up to $300 for cash donations for individuals taking the standard deduction. The temporary deduction was extended and expanded to $600 for married couples filing jointly for 2021 and then expired. Under OBBB, 'year-end charitable deduction planning could be beneficial,' Gray said. 'You can deduct $1,000 per person, or $2,000 per couple, in above-the-line charitable contribution deductions if you cannot itemize.' An above-the-line deduction can be taken without itemizing. It's valuable because it lowers your adjusted gross income, which lowers your tax liability and may help you qualify for other deductions or tax credits. Interest deduction on personal auto loans OBBB has made new personal auto loan interest deductible for non-itemizers for the first time ever, said Brian Schultz, certified public accountant in Plante Moran Wealth Management's tax practice. Personal auto loan interest used to be deductible but only as an itemized deduction until the Tax Reform Act of 1986 eliminated it. Under OBBB, Americans can deduct up to $10,000 of interest on their taxes, beginning in 2025 through 2028. There are specific requirements to qualify for the deduction that could make it harder to take advantage of, some warn. For example, the purchase must be a new, U.S.-assembled vehicle for personal use, and income limitations apply. However, if you can find a qualified car and are eligible for the deduction, the calculus could change when deciding whether to buy or lease a car and how much each cost, Schultz said. More benefits for families There are two benefits families should be aware of even if they take the standard deduction, Schultz said. If your employer offers a higher Dependent Care Flexible Spending Account (DCFSA). Funds are withdrawn from your paycheck before taxes are deducted and can generally be used for care for a child or adult unable to care for themselves. The OBBB permanently increases the annual maximum contribution to $7,500 (or $3,750 for married couples filing separately) from $5,000. Though the increase begins next year, enrollment in these plans starts soon in 2025, Schultz said. Other than a temporary increase during COVID to $10,500, (or $5,250 for married individuals filing separately) in 2021 from the American Rescue Plan Act, the contribution level had been stuck at $5,000 for 40 years, according to insurance brokerage Newfront. The Child and Dependent Care Credit (CDCC) gets a double boost, starting in 2026, Schultz said. First, the credit rate increased to 50% from 35% of qualifying expenses, up to $3,000 for one child and up to $6,000 for two or more children, for families with the lowest incomes. There isn't an income ceiling, but the percentage gradually decreases as income rises. Second, the way the new credit rate phases down for taxpayers, the income threshold to receive the lowest 20% credit has jumped to $206,000 for a married couple filing jointly and $103,000 for individuals from pre-OBBB income levels of $86,000 and $43,000, respectively. These changes will result in nearly 4 million families seeing an increased tax credit, according to First Five Years Fund, a nonprofit focused on ensuring families have affordable access to quality child care and early learning programs. 'Under current law, a family with two young children making less than $150,000 typically receives around $1,200,' said Sarah Rittling, the organization's executive director, in a statement after Congress passed the OBBB. With the 'enhancements, that benefit would see a $900 boost that can make a meaningful difference for parents managing tight budgets.' With some planning, Americans may also be able to score a larger credit, Schulz said. For example, boosting a 401(k) contribution could reduce your taxable income enough to pick up a larger CDCC in 2026. 'A lot of new changes with income phaseouts,' he said. 'Be mindful of income levels.' Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday. This article originally appeared on USA TODAY: Plan now for these 'One Big Beautiful Bill' tax benefits, experts say
The Hindu
14-07-2025
- Business
- The Hindu
Environment Ministry defends new coal-plant norms as ‘cost effective, climate coherent'
The Ministry of Environment and Forests said in a note on Monday (July 14, 2025) that its recent decision to exempt a majority of thermal power plants from installing flue gas desulphurisation (FGD) units was a 'scientifically justified shift towards more targeted, cost-effective and climate-coherent regulation' and not a rollback of environmental safeguards. FGD units are used to cut sulphur dioxide emissions from coal plants and in 2015, the Ministry had made the systems mandatory for all thermal plants. However, only 8% of India's roughly 180 coal plants have done so. The other plants have received multiple extensions from the Ministry for reasons such as limited availability of these units and high cost. The latest order, however, says only a minority of plants – 22% -- located in major cities with a history of poor air quality need to install these units. The revised policy, its note says, reflects India's '...declining ambient sulphur dioxide levels, the limited role of sulphur dioxide levels in driving PM2.5 health impacts and... the disproportionate resource and environmental costs of indiscriminate FGD mandates'. The Ministry's note was in response to 'media reports'. According to the Ministry, India's annual sulphur dioxide concentration standard of 50 microgram/cubic metre is more stringent than Japan (66), European Union (52.4) and Australia (66). A 2023 measurement in 492 cities, the Ministry said, found that all but two -- Dehradun and Kolar – were compliant. Indian coal was naturally low in sulphur (0.5% of weight) but had high ash content and therefore led to low sulphur dioxide concentrations. Studies had shown that cities with thermal power plants that have FGD technology and those without FGD technology didn't show any 'significant difference' in sulphur dioxide concentrations, it said. 'Eliminating all sulphur dioxide emissions would only result in a marginal improvement of particulate matter concentrations... At ₹1.2 crore per MW [megawatt], the capital expense of installing FGD would be ₹2.54 lakh crore and would only bring about a marginal benefit,' it said. Under new rules, only about 11% of India's 600 thermal power units – a single plant can have multiple units – have to mandatorily install FGD systems. These plants, called 'Category A' units, are located within a 10-km radius of the National Capital Region or cities with a population of at least one million (2011 Census). Originally, these plants were to have FGD systems in place by 2017 but have been given multiple extensions. The latest – as per a gazette notification this week – is December 30, 2027. Another 11% of units, falling under Category B, located within 10-km radius of Critically Polluted Areas (CPAs) or Non-Attainment Cities (NACs) may or may not have to install FGD systems. This would depend upon a decision by an Expert Appraisal Committee, an existing body constituted by the Ministry to decide on according environment clearance to proposed coal plant projects. Those that must install FGD systems have a deadline of December 30, 2028. CPAs are regions or industrial clusters that are extremely polluted and deemed so according to Central Pollution Control Board (CPCB) criteria. NACs are those that have the worst air quality and haven't met National Ambient Air Quality Standards (NAAQS) for at least five years, and there are 131 of these. The remaining 'Category C' thermal power plants, or 78% of the total plants, are now exempt from installing FGD systems.
Yahoo
06-07-2025
- Business
- Yahoo
Trump tax bill brings some big changes to 529 plans
529 education savings plans are getting a major upgrade under President Trump's massive tax bill, particularly for parents looking to stash away cash for K-12 expenses. First, a quick overview: 529 plans allow anyone — not just parents — to set aside money in an investment account for certain education expenses. Earnings aren't subject to federal taxes, and withdrawals are similarly tax-free if the money is spent on a qualified category. The savings plans are typically thought of as being for college students, but they benefit young children too. Right now, due to changes first made in Trump's 2017 tax bill, parents can withdraw up to $10,000 each year to pay for K-12 tuition costs. The new legislation bumps up that benefit even more, allowing up to $20,000 in annual withdrawals while widening the definition of 'qualified expenses' in K-12 to include non-tuition categories like books, tutoring, standardized testing fees, educational therapies for children with disabilities, and more. Certain professional credential fees will also now be covered as qualified expenses. For example, Andy Whitehair, a director with the advisory, tax, and assurance firm Baaker Tilly, noted that CPAs like him could tap 529 funds to cover things like exams and licensing costs. That means 529 plans are now much more than just a college savings vehicle. 'You're expanding the eligible expenses that you can pay out of this, so I think that just inherently is going to make them more useful,' Whitehair said. Elyse Germack, an attorney and CPA who does tax and estate planning in Birmingham, Mich., agreed that the wider perks will help parents pay for K-12 costs. 'Many families are interested in having greater options for use of funds, especially when it comes to K-12, and having the ability to pay for private school along with public school-type expenses would be very helpful,' Germack said. Still, the upgrades will only reach those who are both aware of the plans and have the ability to contribute to them, meaning lower-income families will likely be left out. Patricia McCoy, a professor at Boston College Law School, wrote in a recent Substack post that 529 plans "primarily are used as tax shelters by the top 10 percent." Many families don't have 529 plans, McCoy wrote, and those that do are typically in higher tax brackets. Lower-income families, McCoy said, would benefit more from Pell Grant funding. Then there's Trump accounts, a new tax-advantaged investment vehicle for children that has to be established before they turn 18 and can't be tapped until after they turn 18. 'It's basically a kid IRA,' Whitehair said. He explained: 'Funds would grow tax-deferred; when you take them out they would be taxable to the extent of income that you've earned; if you're waiting until you're age 59 and a half — normal retirement age — you can take out without penalty; if you're taking it out before then it would need to be for certain qualified expenses like under the IRA rules.' Those qualified expenses include college expenses and first-time home-buying costs up to $10,000, Whitehair said. There's a $5,000-a-year contribution limit, but the government will contribute $1,000 to the Trump accounts as part of a pilot program for children born between Dec. 31, 2024, and Jan. 1, 2029. Still, 529s remain optimal for those looking to save for education expenses. 'A 529 plan is still going to be the gold standard,' Whitehair said. 'If your sole goal is to save for education, any of the funds that come out of the 529 plan — all the income that you've earned — if you're using it for qualified education expenses, it's going to come out tax-free.' Emma Ockerman is a senior reporter for Yahoo Finance covering economic and labor issues in personal finance. Sign up for the Mind Your Money newsletter
Forbes
03-07-2025
- Business
- Forbes
Final Tax Reform Bill Preserves SALT And PTET Deductions For Traders And Professionals
Traders and professionals win as Congress drops PTET restrictions and expands the SALT cap in final tax deal. Final Tax Reform Bill Preserves SALT and PTET Deductions for Traders and Professionals After weeks of deliberation, revisions, and intense advocacy, the Senate and House have passed the final version of the One Big Beautiful Bill Act (OBBBA, H.R. 1), sending it to President Trump for signature on Independence Day. The final legislation maintains critical tax benefits for traders and other professionals by preserving access to state and local tax (SALT) deductions and the pass-through entity tax (PTET) workaround. The original Tax Cuts and Jobs Act (TCJA) capped the SALT itemized deduction at $10,000 per year, causing tax increases for many professionals in high-tax states. In response, 37 states adopted PTET regimes allowing pass-through businesses—like LLCs, partnerships, and S-Corps—to deduct SALT at the entity level and bypass the cap. This workaround became vital for service businesses and traders who qualified for trader tax status (TTS). The House version of H.R. 1 proposed increasing the SALT cap to $40,000 in 2025 with phaseouts based on income, but controversially denied PTET deductions to specified service trades or businesses (SSTBs)—including accountants, lawyers, doctors, and traders. The original Senate draft mirrored some of these restrictions, proposing a 50% cap on the PTET deduction. Thanks to strong feedback from CPAs, industry leaders, and affected taxpayers—including traders—Senate Republicans revised their position. On July 1, the Senate passed a new version of the bill that: This revised Senate bill retained the SALT workaround while avoiding discrimination against SSTBs, and it passed the Senate on July 1. On July 3, the House approved the Senate's version without any amendments, ensuring that the bill would proceed directly to the President's desk in time for the July 4 deadline. This legislative alignment locked in the Senate's more favorable approach to SALT and PTET deductions. The final legislation avoids the unfair treatment proposed in earlier versions and maintains parity between pass-throughs and C corporations. Traders with TTS who operate via PTET-eligible entities can continue to deduct state taxes at the entity level, significantly lowering their federal tax liabilities. The AICPA welcomed this outcome, with President and CEO Mark Koziel emphasizing that removing PTET limits was vital for fairness and simplicity in the tax code. The final result ensures continuity for millions of small businesses and traders. This legislative victory was hard-won and shows the power of informed advocacy. By preserving the SALT cap workaround and maintaining access to PTET deductions for all professions, the final tax reform bill supports a fairer and more competitive environment for traders and service businesses.
