• Key Provisions Affecting Individuals & Businesses

    Signed into law on July 4, 2025, the OBBB introduces new deductions for working Americans, increases the SALT deduction cap, and modifies several business incentives. Many provisions take effect for the 2025 tax year and sunset after 2028. Sawtooth is monitoring guidance as the IRS releases details.

    Plan Ahead: Several 2017 Tax Cuts Expire Soon

    Many provisions from the 2017 Tax Cuts and Jobs Act are set to expire after 2025. Individuals and business owners should start reviewing their structure and cash-flow strategy now to avoid last-minute adjustments when those changes hit.

  • Income Tax Rates

    For tax year 2025, the top federal individual income-tax rate remains at 37% (for singles with taxable income over $626,350, and married filing jointly over $751,600).

    Standard Deduction Increases for 2025

    The IRS has adjusted standard deductions for inflation. In 2025, single filers can deduct $15,750, heads of household $23,625, and married couples filing jointly $31,500.

    New Senior Deduction Offers Extra Relief

    New deduction for seniors (age 65+) effective 2025–2028: up to an additional $6,000 above the standard deduction (phases out at higher incomes).

    Credits for Working Americans

    Under the new One Big Beautiful Bill Act, certain workers may qualify for new deductions related to overtime and tips. Keep good records — accurate reporting will be key to taking advantage of these new opportunities.

  • New Small-Business Deductions Under the 2025 Law

    The OBBB expands eligible deductions for certain small-business expenses beginning January 2025. Owners should review spending categories and depreciation schedules to capture every allowable deduction in the coming year.

    Pass-Through Entities Get Updated Rules

    Pass-through businesses — LLCs, Partnerships, and S-corps — face new eligibility and reporting changes under the 2025 law. These updates may alter how qualified business income (QBI) and deductions are calculated. Now’s the time to evaluate whether your entity structure is still the right fit.

    Bonus Depreciation Phase-Out Nears

    Businesses purchasing new equipment or vehicles should be aware that 100% bonus depreciation continues to phase down after 2025. Strategic timing of capital purchases can make a big difference in your tax position.