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Monarch Tax & Advisory, LLC

One Big Beautiful Bill

Frequently Asked Questions

What the One Big Beautiful Bill Means for You

Key Planning Insights for Retirees, Families, and Small Business Owners

What are the most important changes for retirees and older individuals?

The law locks in lower tax brackets and the higher standard deduction, adds a temporary senior deduction (2025–2028), increases the estate and gift tax exclusion, and changes charitable giving rules so timing income, revisiting estate plans, and optimizing charitable gifts matter now.

How does the SALT deduction phase-out work for higher-income couples and what’s the hidden cost?

Joint filers with MAGI above $500,000 begin losing part of the $40,000 SALT cap 30% of income over that threshold down to a $10,000 floor. That phase-out effectively creates a surcharge, pushing the federal marginal rate on the $500k–$600k band well above the statutory 37%

What permanent small business tax benefits should I be using now?

The 20% qualified business income (QBI) deduction is permanent (with updated phase-in thresholds), 100% bonus depreciation is restored for qualifying property, and Section 179 expensing limits are dramatically increased making capital investment timing and income/expense planning critical.

How should families and multi-generation clients think about wealth transfer and new savings vehicles

Beyond traditional estate planning, the new children’s tax-deferred “Trump accounts” offer a fresh way to seed intergenerational savings via automatic $1,000 government seed for 2025–2028 births, tax-deferred growth in U.S. equity index funds, and structured gifting to support grandchildren.

What upcoming deduction changes should small businesses prepare for?

Starting in 2026, the deduction for employer-provided convenience meals (on-site cafeterias, snacks, etc.) is eliminated and only certain exceptions remain. Business and travel meals still retain partial deductibility through 2025, so review internal meal policies and documentation now.

Can working extra hours or getting tips actually give me a tax break?

Yes! qualified overtime and tips receive favorable treatment for federal income tax (not payroll or necessarily state tax): up to $12,500 (single) / $25,000 (joint) of overtime and up to $25,000 of tips can reduce your taxable income, with the benefit phasing out above the MAGI thresholds. Married couples must file jointly to claim the overtime deduction. For every $1,000 (or part thereof) over the threshold, the maximum deduction is reduced by $100.

Important caveat: this only affects federal income tax—Social Security, Medicare (FICA), and state income taxes still apply on that income. Plan around it to maximize the temporary upside without assuming it’s a full payroll tax exclusion.