This year brings several important tax developments for individuals and small businesses. With many provisions from the 2017 Tax Cuts and Jobs Act (TCJA) set to expire aer 2025, Congress is acvely negoang possible extensions or changes. Below is a curated summary of the most relevant updates for individual filers, corporaons, and partnerships.
INDIVIDUAL TAX UPDATES (1040 FILERS)
2025 Tax Brackets & Deducons
• Standard Deducon:
o Married Filing Jointly: $30,000
o Single: $15,000 ($17,000 if 65+)
o Head of Household: $22,500 ($24,500 if 65+)
• Capital Gains:
o 0% rate: up to $96,700 (joint taxable income)
o 15%: up to $600,050 (joint taxable income)
o 20%: over $600,050 (joint taxable income)
Health Savings Accounts (HSAs)
• Contribuon limits for 2026:
o Self-only: $4,400
o Family: $8,750
o Add $1,000 if age 55+
• Requires enrollment in a high-deducble health plan (HDHP).
1099-K Reporng Thresholds
• New lower thresholds connue to phase in:
o $5,000 for 2024 forms sent in 2025
o $2,500 for 2025 forms sent in 2026
o $600 begins in 2027
This impacts anyone receiving payments via PayPal, Venmo, or similar plaorms.
Student Loan Forgiveness
• Forgiven student debt remains tax-free through 2025. No extension is expected.
Electric Vehicle (EV) Tax Credits: New EV Credit (up to $7,500):
o Income Limits: Modified Adjusted Gross Income (MAGI) must be below:
$300,000 for joint filers
$225,000 for heads of household
$150,000 for single filers
o Vehicle Price Caps:
$80,000 for vans, SUVs, and pickup trucks
$55,000 for other vehicles
o Used vehicles may also qualify when purchased from a licensed dealer
Up to $4,000
Income and vehicle price limits differ
RETIREMENT & INVESTMENT UPDATES
IRA & 401(k) Changes
• 401(k) Contribuons: Up to $23,500 in 2025
o Standard catch-up (Age 50+): $7,500
o Super Catch-up for ages 60–63: $11,250
• IRA Contribuons: $7,000 (+$1,000 if age 50+)
• Roth IRA income limits: Phase out at $236,000–$246,000 (joint taxable income)
BUSINESS TAX UPDATES (1120S & 1065, SCHEDULE C FILERS)
Bonus Depreciaon Shrinking
• 2025: Only 40% bonus depreciaon allowed.
• Previously 60% in 2024; set to drop to 20% in 2026 unless restored by new legislaon.
Secon 179 Expensing
• Businesses can fully expense up to $1.25 million of assets, with a phase-out beginning at $3.13
million.
Vehicle Deducon Limits
• Business car first-year cap (with bonus depreciaon): $20,200
• Large SUVs (over 6,000 lbs): First $31,300 can be expensed + 40% bonus on remainder.
• Full expensing available for qualifying pickup trucks over 6,000 lbs with beds ≥6 feet.
MISCELLANEOUS & REMINDERS
IRS Staffing & Oversight
• IRS is undergoing massive layoffs and restructuring, including leadership shakeups.
• Cuts in IRS funding and deferred rerements may affect enforcement and taxpayer services in
coming years.
Digital Asset Reporng
• Broker reporng of crypto sales begins for 2025 transacons (reported in 2026 on Form 1099-
DA).
• Decentralized exchanges (DeFi) are exempt from reporng aer a new law nullified a prior
regulaon.
Mileage Rates
• Business mileage for 2025: 70¢ per mile
What’s Coming in 2026?
TCJA Extension: Where Things Stand
Congress is acvely working to extend key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), which are
set to expire aer 2025. The House Ways and Means Commitee recently approved a major tax package
that includes:
• Permanent lower individual tax rates
• Extended standard deducon and child tax credit
• Extended 20% QBI deducon for pass-throughs
• Permanent higher estate tax exempon
The bill, called the One Big Beautiful Bill Act, also proposes:
• No tax on ps or overme
• A $4,000 “senior bonus” deducon for those 65+, phased out at higher incomes
Esmated cost: $4.2 to $5.3 trillion over 10 years
The bill is expected to proceed to the House floor for a vote later this week. If passed, it will move to the
Senate, where it may face challenges due to differing views on fiscal policy and spending cuts. The use of
the budget reconciliaon process could allow the Senate to pass the bill with a simple majority,
bypassing the filibuster.