Update: What the "One Big Beautiful Bill Act" Means for you

 The 2025 tax landscape has changed dramatically. Here is how Tax Tyme is applying the new OBBBA laws to save you money. 

 The passage of the One Big Beautiful Bill Act (OBBBA) has created the most significant shifts in the tax code since 2017. For the 2025 tax year (filing now in 2026), several major promises have become law. However, the "headlines" don't always tell the full story—details matter.

Here is what our clients need to know to stay compliant and profitable.

 New Deductions vs. Expiring Credits

The OBBBA introduced powerful new deductions for workers, but strict rules apply to how they are calculated.

•  The Benefit: You can now deduct "Qualified Overtime Compensation" from your federal income.
• How It’s Calculated: This is an "Above-the-Line" deduction. It lowers your Adjusted Gross Income (AGI) directly, meaning you can claim this deduction even if you take the Standard Deduction.
• The Allowed Portion: The deduction applies only to the overtime premium—the "extra" pay—not the base wage for those hours.
• Example: If your regular rate is $20/hr and your overtime rate is $30/hr (time-and-a-half), you can deduct the extra $10/hr. The base $20 is still taxed as normal income.
• The Cap: The annual deduction limit is $12,500 for single filers and $25,000 for joint filers.
• We will need your final paystub in order to calculate this deduction. 

• The Benefit: You can deduct up to $10,000 in interest paid on a personal vehicle loan.
• The Fine Print: To qualify under OBBBA "Buy American" provisions, the vehicle must be NEW (not used) and US-assembled (VIN starting with 1, 4, or 5).

•  The "State and Local Tax" deduction cap has been raised from $10,000 to $40,000. This is a massive win for homeowners in our area with higher property taxes. 

•  The Change: Under the old law, bonus depreciation was scheduled to drop to 40% or 20% for 2025. The OBBBA brought it back to 100%.
• The Impact: If you buy a rental property and perform a Cost Segregation Study, you can now immediately write off 100% of the non-structural components (appliances, carpeting, special electrical/plumbing, landscaping) in Year 1. This can create a massive "paper loss" to offset your rental income.

•  The Change: The maximum deduction for Section 179 has been increased to $1.25 million, indexed for inflation.
• The Impact: This is ideal for businesses with high net income this year. It allows you to buy significant assets (heavy equipment, work vehicles over 6,000 lbs, software) and deduct the full purchase price immediately to drastically lower your taxable profit.

• The Change: The OBBBA adjusted the individual income tax brackets and raised the Standard Deduction.
• The Impact: Since your LLC or S-Corp income "flows through" to your personal return, these individual rate cuts directly lower the tax you pay on business profits. We may need to adjust your estimated tax payments for 2026 to reflect these lower effective rates.

•  The Change: Under the old law, bonus depreciation was scheduled to drop to 40% or 20% for 2025. The OBBBA brought it back to 100%.
• The Impact: If you buy a rental property and perform a Cost Segregation Study, you can now immediately write off 100% of the non-structural components (appliances, carpeting, special electrical/plumbing, landscaping) in Year 1. This can create a massive "paper loss" to offset your rental income.

• The Change: The "Corporate Transparency Act" requirement to file Beneficial Ownership Information (BOI) reports with FinCEN has been suspended/cancelled for domestic small businesses.
• The Impact: Investors who use the "One LLC Per Property" strategy (stacking LLCs) no longer have to file a federal report for every single LLC revealing their personal home address and ID. Your anonymity and asset protection strategies remain private.

• Federal income tax refunds will no longer be issued by check.
• You may still send Federal tax payments in the mail, but the IRS strongly recommends electronic payments. 

IRS Direct Pay (Recommended)

• Website: Visit IRS.gov/DirectPay
• Accepted Methods: Checking or Savings accounts (ACH)
• Fees: $0.00 (FREE)

IRS Online Account

• Website: Visit IRS.gov/Account
• Accepted Methods: Bank Account (Free) or Debit/Credit Card (Fees Apply)
• Note: Requires identity verification (ID.me) 

Pay by Phone (888-PAY-1040)

• Phone Number: Call 1-888-729-1040 (Authorized processor)
• Accepted Methods: Card Only
• Estimated Fees: 

                             *Debit Card: Flat fee of approx. $2.15

                             *Credit Card: Percentage fee of approx. 1.75% (Minimum fee of $2.50)

Taxpayers expecting a Federal refund should ensure accurate banking information is provided when filing.