President Donald Trump’s new tax bill was narrowly approved by the House on Thursday, May 22nd, passing with a 215-214 vote. The tax bill, titled “One Big Beautiful Bill Act” and exceeding 1,000 pages in length, now heads to the Senate for consideration and potential revisions.
While there are many changes presented in the bill, we are providing a glimpse into the proposed legislative package that we feel may be most impactful for the high-net worth clients of GenCrest Capital Partners.
Key points:
- 2017 Tax Cuts and Jobs Act: Key provisions from this Act would be made permanent. These include lower marginal tax rates across most income brackets (with a top rate of 37%), an increased standard deduction and expanded child tax credit.
- Standard Deduction: For 2025, there will be a $1,000 increase for single and head of household filers, $2,000 increase for joint filers, and $4,000 total potential increase for single seniors ($8,000 for senior joint filers).
- SALT Cap: For incomes $500,000 and lower, the “SALT” tax deduction (which includes state/local income taxes as well as property and vehicle taxes) increases from $10,000 to $40,000 followed by additional increase in deduction and income threshold for the next ten years.
- Child Tax Credit: A $500 boost from 2025-2028, bringing it from $2,000 to $2,500 per child. Then the child tax credit would return to $2,000, indexed for inflation.
- EV Tax Credit: Elimination of the federal tax credit for energy vehicle purchases ($7,500 for new vehicles, $4,000 for used vehicles).
- Qualified Business Income: Increase in deduction for small businesses (including partnerships and S corporations) from 20% to 23% of qualified business income.
- 1099-MISC Income: Raises the 1099-MISC threshold from $600 to $2,000 and repeals the 1099-K reporting requirements for “gig-economy” income.
- 529 Education savings accounts: Expands qualified 529 plan distributions to include K-12 expenses for additional flexibility.
- Estate Tax: Exemption rises to $15 million for single filers, $30 million for joint filers, and is then adjusted for inflation going forward.
We will continue to monitor the proposed bill’s progress and will provide future timely updates as they are available.
Sources: Trump’s big tax bill has passed the House. Here’s what’s inside it; US House narrowly passes Trump’s sweeping tax-cut bill, sends on to Senate; Trump’s ‘One Big, Beautiful Bill’ With Trillions in Tax Cuts: Passes House; Is the EV Tax Credit Going Away Under Trump? What You Need to Know