As promised last week, here is the remainder of the article about new tax laws, numbers 8-15. Written by Patrick Horning, J.D., C.L.U., CRP for Northwest Mutual, which appeared on LinkedIn on 7/10/25. Hope this is helpful.
8. “Taxpayers taking the standard deduction are now also able to deduct charitable contributions
Who is affected: Taxpayers who make charitable donations and use the standard deduction
What the bill says: Starting in 2026, taxpayers who use the standard deduction can also deduct certain charitable contributions—up to $1,000 for single filers or $2,000 for married couples filing jointly.
9. A new tax deduction is available for those earning tips and overtime wages
Who is affected: Tipped workers, including servers, wait staff and others, as well as those who receive overtime pay
What the bill says: Income earned from tips, up to $25,000, is now eligible for a tax deduction. The benefit phases out for single filers who make over $150,000 and married joint filers who make over $300,000. People who earn overtime are eligible to deduct up to $12,500, with the same phaseouts as above. Taxpayers who use the standard deduction can use these deductions, which are available from 2025 through 2028.
10. Seniors are now eligible for an added tax deduction
Who is affected: Taxpayers who are at least 65 years old
What the bill says: The law creates a new $6,000 deduction for most seniors and a $12,000 deduction for joint filers for the 2025 to 2028 tax years. The deduction phases out at higher incomes.
11. Business owners can claim a larger tax deduction for qualified business income
Who is affected: Business owners of sole proprietorships, S corporations and limited liability companies (LLCs)
What the bill says: The 20 percent qualified business income deduction for certain S corporations, partnerships and sole proprietorships is made permanent in 2026. The phase-in threshold increases from $100,000 to $150,000 for married joint filers and from $50,000 to $75,000 for single filers. Those figures will now adjust for inflation annually.
12. Dependent Care Flexible Spending Account (FSA) contribution limits increase
Who is affected: Individuals who qualify for tax-advantaged accounts to pay for dependent care
What the bill says: The amount of money a household can contribute to a qualified dependent care FSA increases from $5,000 to $7,500 per year starting in 2026.
13. 529 Plans can now cover more qualified educational expenses
Who is affected: Individuals and families who use tax-advantaged 529 Plan education-savings-accounts.
What the bill says: The legislation expands the qualifying ways to use 529 plans to include more homeschool, vocational, postsecondary-credentialing and K-12 expenses up to $20,000. Previously, the plans focused on higher education as well as qualified K-12 education expenses of no more than $10,000.
14. “Trump accounts” are now available for minor children
Who is affected: Guardians of minor children
What the bill says: A new type of account, a “Trump account,” will be available for minor children to begin saving. It is similar to a traditional (non-Roth) Individual Retirement Account (IRA), but it is not subject to the earning requirements of an IRA. The federal government will run a pilot program for qualifying children born in 2025 through 2028 providing a one-time $1,000 credit. Many questions remain on these accounts, including which financial institutions can hold them. No contributions can be made to Trump Accounts prior to July 4, 2026, so the Treasury Department will need to provide guidance before then.
15. New student loan borrowing limits are set and a new loan repayment plan is introduced
Who is affected: Individuals looking to take out and/or repay federal student loans.
What the bill says: Numerous provisions in the bill referred to as OBBBA cap the maximum amount of federal student loans for individuals. Borrowers will now have a choice between two repayment plans: a standard repayment plan and a new income-driven repayment plan.
Your financial advisor can help you recalibrate your plan
Though it may look like a lot is changing, many of these changes extend tax provisions that were scheduled to expire at the end of the year, which created uncertainty when trying to plan. With clearer answers on what your future tax impact may be, you’re in a position to make decisions about how to plan for the future.”
As I said, I hope this information has been helpful. I am not a financial advisor, but I am ready to assist you with your estate plan, and I’m confident that your financial advisor can provide valuable guidance as well. As a team, we can ensure your plan meets your needs and protects your hard-earned assets and loved ones. Call to schedule a meeting with me. I can be reached at 513-399-7526 or visit my website at www.davidlefton.com.
Source: LinkedIn, 7/10/25 by Patrick Horning, J.D., C.L.U, CFP for Northwest Mutual