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Tax Talk Thursday: Major Income Tax Changes Just Signed — Here’s What You Need to Know

  • Writer: May Sung
    May Sung
  • Jul 3
  • 2 min read

Big news for taxpayers: Congress passed a sweeping tax package making major changes for individuals, families, and small businesses. If you pay U.S. income taxes — this impacts you.


Here’s your Tax Tip Thursday update:


Higher Standard Deduction: The standard deduction goes up immediately. This bigger deduction means more people will skip itemizing — but for many homeowners in high-tax states, itemizing might still pay off.


  • Single: $15,000

  • Married Filing Joint: $30,000

  • Head of Household: $22,500


SALT Deduction Increased: The cap on state and local tax (SALT) deductions jumps from $10,000 to $40,000, with a phaseout for high earners (over $500,000 MAGI). Good news if you own a home in California, New York, or other high-tax states.


Child Tax Credit Boosted: The Child Tax Credit increases to $2,500 per qualifying child through 2028, then adjusts for inflation.


New Deductions for Tips, Overtime & Car Loans

  • Tipped workers can deduct up to $25,000 in reported tips.

  • Overtime workers can deduct up to $12,500 for overtime pay.

  • Car buyers can deduct up to $10,000 in interest on loans for U.S.-assembled vehicles.


Extra Deduction for Seniors: Taxpayers age 65 and older get a new $6,000 deduction, phasing out at higher incomes — this could reduce taxable Social Security income.


Some Clean Energy Credits Are Ending: Certain renewable energy and EV tax credits will phase out sooner — if you’re planning upgrades, check your timeline.


Tax Tip: Mid-Year Action Steps: When tax laws change in the middle of the year, smart taxpayers plan ahead:

  • Double-check your W-4 withholding — bigger deductions may mean you’re having too much or too little withheld.

  • Run the numbers to see if itemizing beats the standard deduction now that the SALT cap is higher.

  • If you’re buying a car, planning solar, or claiming other energy credits — check deadlines before they disappear.


MKHS Tax Group is ready to help you plan, adjust, and stay compliant. Reach out now to get ahead before year-end at info@mkhstaxgroup.com.

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