July 1, 2025 – D.C. is in full negotiation mode, and the latest House and Senate versions of the new tax bill include major proposed changes:

✔️ Expanded child tax credits
✔️ New car loan interest deductions
✔️ Bonus depreciation returns
✔️ R&D write-offs restored
✔️ SALT cap changes (again)
✔️ Repeal of energy tax credits
✔️ And even special deductions for tip income and overtime pay

We’ve put together a visual breakdown of the top 7 proposed tax provisions so you can see what’s being debated now (and what it means for you).

💡 Whether you’re a business owner, investor, or employee, it’s worth a quick look before these rules hit the books.

  1. Child Tax Credit

Current Law

Proposed Changes

$2,000 tax credit per child under 17; expires after 2025

🏛 House: $2,500 (2025–2028), then adjusts for inflation.

🏛 Senate: $2,200 permanently, with inflation adjustment. SSN requirement tightened.

2. SALT Cap + PTET Repeal

Current Law

Proposed Changes

$10,000 cap on deduction for State and Local Taxes (SALT) paid; expires 2025. This includes property taxes, sales tax, and some state taxes.

Raise to $40,000 ($20,000 MFS); phased out above $500k income.

🏛 Senate: Temporary cap increase (5 yrs).

🏛 House: Makes it permanent.

State tax paid by a pass-through entity is deductible

❗ Repeals PTET workaround. SSTBs (like accountants, lawyers) subject to the cap.

3. Business Owners – §199A + Bonus Depreciation + R&D

Current Law

Proposed Changes

Deduction of 20% from Qualified Business Income (QBI).

🏢 Increase to 23% of net qualified income; permanently available. Exceptions remain.

Bonus Depreciation

Phasing out by end of 2026

⚡ Restored to 100% for assets placed in service 2025–2029; extended for some assets to 2030.

Research & Development (R&D) Expensing Amortized over 5 years (domestic)

💻 Domestic R&D immediate expensing for 2025–2029; 10-year amortization optional.

4. Tips & Overtime

Proposed Deductions
Tip Income Deduction

  • 💸 Above-the-line deductions for W-2 or 1099 tips
  • 🚫 Phased out for high earners ($150k+)
  • Available 2025–2028.
  • Only available in customarily tipped industries.

Overtime Pay Deduction

  • 💸 Above-the-line deduction for OT pay under FLSA rules.
  • 🚫 Phased out for high earners ($150k+)

5. Standard Deduction, Car Loans, & Seniors

Current Law

Proposed Changes

Standard Deduction (increased in 2018; expires 2025)

🏛 Senate: Permanently expands.

🏛 House: Expands through 2028.

No Car Loan Interest Deduction for Personal Vehicles

🚗 Above-the-line deduction up to $10,000 in interest on personal auto loans (US-assembled only). Phases out above $100k/$200k income. Applies 2025–2028.

Senior Bonus Deduction of $1,950 single / $1,550 per spouse

👵 Extra $4k standard deduction for seniors (House) or $6k (Senate). Phases out above $75k single / $150k MFJ.

6. Estate & Gift Tax Exemption

Current Law

Proposed Changes

$13.99M; expires after 2025

👑 Increase to $15M, permanently indexed for inflation.

7. Clean Energy Tax Credits (repeals begin 2026)

Current Law

Vehicle Credits (up to $7,500)

  • Clean Vehicle Credit (§30D) — Eliminated for vehicles acquired after 12/31/2026
  • Used EV Credit (§25E) — Repealed after 12/31/2025

Home Energy Credits

  • Energy Efficient Home Improvement Credit (§25C) — Ends after 2025
    • 30% of qualified expenses, up to $1,200/year for windows, insulation, HVAC, doors, etc.
  • Residential Clean Energy Credit (§25D) — Ends after 2025
    • 30% of qualified costs for solar panels, battery storage, wind, geothermal.

⚠️ Note: These provisions are still under negotiation and not yet law. This summary highlights key proposals but is not an exhaustive list of all items in the current legislation.

Questions? Reach out! 954-933-1558