Latest news with #taxbenefits
Yahoo
a day ago
- Business
- Yahoo
Here's exactly how much you'll save on your 2026 taxes, by income bracket: Trump's One Big Beautiful Bill benefits
Now that President Donald Trump's so-called 'big, beautiful bill' is the law, you're probably wondering how much you'll save on your taxes when you file next year. The Tax Policy Center (TPC), a nonpartisan think tank staffed by the Urban Institute and the Brookings Institution, has crunched the numbers. Here's a rundown. Southwest Airlines' open seating is ending: Here's what the new 8-group boarding process will look like Here's exactly how much you'll save on your 2026 taxes, by income bracket: Trump's One Big Beautiful Bill benefits The Trump administration is pushing to open new coal mines that will likely never turn a profit What does the new tax bill do? Trump's One Big Beautiful Bill Act (OBBBA) offers Americans a number of tax benefits by extending the 2017 Tax Cuts and Jobs Act (TCJA), making many of the changes permanent, plus adding some new short- and long-term tax rules. Those changes include certain business and international tax rules, and revenue-raising provisions—including the repeal of various energy tax incentives, according to the TPC. What is the average 2026 tax savings from Trump's 'Big, Beautiful Bill'? An analysis from the TPC shows the new law would reduce taxes for Americans by about $2,900 on average in 2026, with some 85% of households receiving a tax cut in 2026. That figure will drop to just 70% in 2030, after some provisions are phased out. But notably, almost 60% of the tax benefits would go to those in the top quintile, or one-fifth of earners, with incomes of $217,000 or more. It's fair to say that higher-income Americans are more likely to see larger tax benefits than lower-income Americans. Overall, about 4% of households would see their taxes go up in 2026; that percentage would increase to about 10% in 2030. How much will each income bracket save on their 2026 taxes? According to the data compiled by the Tax Policy Center, here's how much the average 2026 tax savings will be for each of the five quintiles of income, as well as the top 1% and 0.1%: Bottom 20% ($0 to $34,600 income range):Second quintile ($34,601 to $66,800):Third quintile ($66,801 to $119,200):Fourth quintile ($119,201 to $217,100):Top 20% ($217,101 and higher):Top 1% ($1,149,000 and higher):Top 0.1% ($5,184,900 and higher):What are some specific tax benefits included in the new bill? There are a number of new tax write-offs and credits, including: the 'No Tax on Tips' provision (which allows eligible tipped workers to deduct a portion of their income from tips on their federal income taxes), a car loan deduction, a deduction for charitable donations, and a child credit. This post originally appeared at to get the Fast Company newsletter: Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
5 days ago
- Business
- Yahoo
This new tax deduction in Trump's ‘big, beautiful bill' lets people cash in on charitable donations up to $2,000. Here's what to know
President Donald Trump's One Big Beautiful Bill Act, which was recently signed into law, offers Americans a number of tax benefits. It makes many of the changes from the Tax Cuts and Jobs Act (TCJA) of 2017 permanent, and adds some new tax rules, both short-term and long-term, according to H&R Block. This new tax deduction in Trump's 'big, beautiful bill' lets people cash in on charitable donations up to $2,000. Here's what to know These are the 3 best questions to ask at the end of your job interview Southwest Florida's housing market is undergoing a material home price correction—here's why In addition to the 'No Tax on Tips' provision (which allows eligible tipped workers to deduct a portion of their income from tips on their federal income taxes) and a car loan deduction, hidden away in the 940-page megabill is another little-known write-off for taxpayers who make charitable donations. Here's what to know. What are the new tax rules for deducting charitable donations? With the new law, taxpayers who claim the standard deduction, not just those who itemize their taxes, will be able to claim a charitable deduction for cash contributions, according to H&R Block. That write-off goes into effect in 2026. Not sure what the difference is between standard and itemized deductions? The standard deduction is a specific dollar amount that reduces the amount of taxable income. However, some taxpayers choose to itemize their deductions if their allowable itemized deductions total is greater than their standard deduction, according to the Internal Revenue Service (IRS). (Other taxpayers aren't entitled to use the standard deduction.) In 2020, during the pandemic, which fell under Trump's first term, the CARES Act—Coronavirus Aid, Relief, and Economic Security Act—allowed a deduction of $300 for cash donations for those taking the standard deduction. And later it doubled that amount to $600 for joint filers or married couples in 2021, before it was phased out, per USA Today. Now, filers can take an above-the-line deduction of up to $1,000 for single individuals and $2,000 for married joint filers, which can lower a taxpayer's bottom line, or gross adjusted income, per H&R Block. However, this does not apply to property contributions made to a charity. How will deductions for charitable donations change for itemized taxes? Also starting in 2026, taxpayers who claim an itemized deduction for charitable contributions will be required to reduce their deduction by 0.5% of their adjusted gross income. This post originally appeared at to get the Fast Company newsletter:
Fast Company
7 days ago
- Business
- Fast Company
This new tax deduction in Trump's Big Beautiful Bill lets people cash in on charitable donations up to $2,000. Here's what to know
President Donald Trump's 'One Big Beautiful Bill,' which was recently signed into law, offers Americans a number of of tax benefits. It makes many of the 2017 changes from the Tax Cuts and Jobs Act (TCJA) permanent, and adds some new tax rules, both short-term and long-term, according to H&R Block. In addition to the 'No Tax on Tips' provision (which allows eligible tipped workers to deduct a portion of their income from tips on their federal income taxes) and a car loan deduction, hidden away in the 940-page mega bill is another little-known write-off for taxpayers who make charitable donations. Here's what to know. What are the new tax rules for deducting charitable donations? With the new law, taxpayers who claim the standard deduction, not just those who itemize their taxes, will be able to claim a charitable deduction for cash contributions, according to H&R Block. That write-off goes into effect in 2026. Not sure what the difference is between standard and itemized deductions? The standard deduction is a specific dollar amount that reduces the amount of taxable income. However, some taxpayers choose to itemize their deductions if their allowable itemized deductions total is greater than their standard deduction, according to the Internal Revenue Service (IRS). (Other taxpayers aren't entitled to use the standard deduction.)
Yahoo
16-07-2025
- Business
- Yahoo
How the "Big Beautiful Bill" boosts QSBS benefits for startup employees and founders
QSBS benefits got an update in Trump's new budget law. Range shares how that could impact startup founders, investors, and employees. The new GOP budget legislation includes a massive win for startup employees and founders: dramatically expanded Qualified Small Business Stock (QSBS) benefits that could save qualifying investors from paying 28% capital gains taxes on millions of dollars in returns. The changes increase the maximum tax exclusion from $10 million to $15 million while allowing partial benefits after just three years instead of the current five-year minimum. For the tech sector specifically, this represents the most significant expansion of startup investment incentives in over a decade. The Joint Committee on Taxation estimates these changes will provide an additional $17.2 billion in tax benefits over the next decade. The GOP budget legislation restructures Qualified Small Business Stock benefits in three key ways: Reduced Holding Period with Tiered Benefits: Previously, you had to hold QSBS for five years to get any tax exclusion. The new rules create a graduated schedule: 50% exclusion after 3 years (effective tax rate: 14%) 75% exclusion after 4 years (effective tax rate: 7%) 100% exclusion after 5+ years (tax-free) Higher Exclusion Limits: The maximum tax-free gain increases from $10 million to $15 million (or 10 times your investment, whichever is higher). Both limits will be indexed for inflation starting in 2027. Raises the Maximum Gross Asset Threshold For Companies: The gross asset threshold rises from $50 million to $75 million, meaning more mature startups remain QSBS-eligible longer. The expanded QSBS rules create three fundamental improvements that benefit anyone holding qualifying startup equity: More Companies Qualify for Tax Exclusion The gross asset threshold increase from $50 million to $75 million means companies can maintain QSBS eligibility deeper into their growth cycles. This expansion particularly helps employees at Series B and C companies who previously lost qualification and extends the window for later-stage hires to capture these benefits. Earlier Exit Flexibility with Meaningful Tax Savings The tiered approach transforms QSBS from an all-or-nothing proposition into a graduated benefit system. Rather than losing all tax advantages if you sell before five years, you could capture a 50% exclusion after three years and 75% after four years. This change removes the penalty for circumstances beyond your control, like acquisitions or liquidity needs. Substantially Higher Tax-Free Gains The exclusion cap jumping from $10 million to $15 million means 50% more capital gains could be sheltered from taxes. For high-growth companies where individual equity stakes can reach eight or nine figures, this expansion captures significantly more wealth preservation. These changes can particularly impact several key groups: Serial Entrepreneurs and Angel Investors gain the flexibility to recycle capital between ventures without waiting for arbitrary holding periods, while still capturing substantial tax benefits. Startup Employees with Stock Options face less pressure around exercise timing, knowing they'll receive meaningful tax advantages even if their company exits before the traditional five-year mark. Venture Capital and Private Equity professionals can optimize portfolio exits around business fundamentals rather than tax calendars, while still preserving significant tax advantages for their investments. Consider this scenario: You exercise $100,000 worth of startup options that grow to $5 million over four years, then your company gets acquired. Under Previous Rules: You'd pay the full 28% QSBS rate on all gains (about $1.37 million in taxes) because you didn't hit the five-year threshold. Under New Rules: You'd get 75% exclusion after four years, paying taxes on only 25% of gains (about $343,000 in taxes)—saving over $1 million. With the "Big Beautiful Bill" signed into law, the new exemption structure applies only to QSBS acquired after the enactment date, making timing important for current equity holders considering exercise decisions. This expansion comes at a particularly relevant moment for the tech sector. As artificial intelligence and other emerging technologies drive new startup formation, the enhanced QSBS benefits create stronger incentives for both founding teams and early employees to take entrepreneurial risks. The proposed changes acknowledge that the original $10 million and $50 million thresholds, established in the early 1990s, no longer reflect today's startup economics. This is just one example of how tax policy and financial regulations are constantly in flux. That's one of the reasons why it can be easy to miss out on new wealth strategy opportunities as they emerge. The expanded QSBS tax exemption doesn't require new risk-taking or complex restructuring to make startup equity positions more valuable from a tax perspective, as long as investors know how to time option exercising and stock sales to take advantage of the exclusion. This story was produced by Range and reviewed and distributed by Stacker. 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
15-07-2025
- Business
- Yahoo
3 Ways Trump's ‘One Big Beautiful Bill' Could Save the Wealthy Thousands
President Donald Trump's signature legislation, the 'One Big Beautiful Bill,' is chock full of measures that will lock in and expand tax benefits for high-income Americans. Find Out: Read Next: 'This bill provides several beneficial tax advantages for high-net-worth individuals,' said Spencer Carroll, CPA and account executive at Gelt. Here's a breakdown of the three most impactful provisions for affluent taxpayers — and what they can do now to prepare. One of the bill's cornerstone provisions is the permanent extension of the top marginal tax rate established by the 2017 Tax Cuts and Job Act (TCJA). 'This would keep the high-net-worth individuals in the top marginal income bracket at a tax rate of 37%, instead of reverting to the pre-TCJA level of 39.6%,' Carroll said. For wealthy Americans, this means thousands in annual tax savings, especially for those with significant income from investments, business ownership or real estate. Learn More: Another major win for high-income earners — particularly entrepreneurs and real estate investors — is the return of 100% bonus depreciation. 'The return of 100% bonus depreciation will allow high-net-worth business owners and real estate investors to take large, accelerated depreciation losses,' Carroll said. 'This will lead to a potential significant reduction in their taxable income.' Previously, only 40% of an asset's purchase price could be deducted upfront. Now, eligible purchases –like equipment, vehicles or property improvements — can be fully written off in the first year. The bill also enacts a dramatic increase in the state and local tax (SALT) deduction cap, raising it from $10,000 to $40,000. 'This will allow for a $30,000 [additional] deduction of state and local taxes, which primarily consists of state income tax and property tax for the average taxpayer,' Carroll said. 'This will equate to $11,000 of federal tax savings for high-net-worth individuals (HNWIs) at the top marginal tax rate.' This change is especially beneficial for residents of high-tax states like California, New York and New Jersey, where state and property taxes often exceed the previous cap. With these changes on the horizon, high-income earners should begin planning immediately. 'High-net-worth individuals should talk now with their CPA about what their financial expectations are for this year and their projected tax bill,' Carroll said. 'Based on this discussion, HNWIs may want to take and look into strategic steps like buying real estate to reduce their tax bill.' More From GOBankingRates Warren Buffett: 10 Things Poor People Waste Money On This article originally appeared on 3 Ways Trump's 'One Big Beautiful Bill' Could Save the Wealthy Thousands
