Episode 27: Big Beautiful Bill. Year End Tax Strategies For S Corps and More.

Are you aware of the looming tax bracket pitfalls that could surprise small business owners and individuals alike? I'm going to pull back the curtain on the complex world of personal taxes in light of the influential "big beautiful bill." We unpack how the Tax Cuts and Jobs Act (TCJA) has forever altered tax brackets, emphasizing the strategic advantages of maintaining a position within the 24% tax bracket to sidestep the hefty increase to 32%. Learn about the vital updates to tax credits, such as the child and dependent care credit, and the upcoming changes to energy efficiency credits projected for 2026, which could significantly influence your financial decisions.

Maximizing your tax deductions has never been more critical, and this episode equips you with the strategies you need. We examine the benefits of itemizing deductions over the standard deduction, spotlighting how the increased SALT deduction limit presents significant savings opportunities, particularly in high-tax states. From understanding the implications of gambling winnings to crafting a plan for charitable contributions, we explore various avenues to trim your taxable income. With new laws set to benefit non-itemizers by 2026, the time to act is now.

Finally, we shift our focus towards the future, emphasizing the importance of strategic financial planning for upcoming generations. I offer insights into how prudent decisions, like utilizing tax-free accounts and staying abreast of changes in estate and gift tax laws, can pave the way for lasting wealth. As the holiday season approaches, I extend warm wishes and remind our listeners that the team at Busy B Advisors is ready to assist with any tax queries you might have. Wishing you a prosperous year-end and successful financial planning!

To learn more about Busy Bee accounting and services, or to simply connect with Eric or Melissa, find them at Busy Bee Advisors.

Transcript

Eric Broughton: [00:00:00] Every little bit counts. And you don't wanna be caught out by not knowing and not taking advantage of something. And that's kind of the whole point on this. Make sure that you give more information rather than less to your tax preparer. I said that before, I'll say it again. The more information you provide to your tax preparer, the more that they are able to help you file a proper return.

One. The second is, is that if there are a strategist like me, it gives them options in talking to you about what can be done for you.

Melissa Broughton: Hello, and welcome to the Real Buzz, taking the sting out of taxes, 

Eric Broughton: brought to you by Busy Bee Advisors. 

Melissa Broughton: I'm Melissa. 

Eric Broughton: I'm Eric. 

Melissa Broughton: He's my husband. She is 

Eric Broughton: my wife. 

Melissa Broughton: Together we're your hosts for this informative and 

Eric Broughton: fun 

Melissa Broughton: podcast where we share forward thinking strategies 

Eric Broughton: to help you get organized. 

Melissa Broughton: Plan ahead [00:01:00] and ultimately pay the bus.

Eric Broughton: Welcome, welcome, welcome. It is another episode of The Real Buzz. This is Eric and it's just me in studio. We're talking about the big beautiful bill. For what it means personally. Previous episode I talked about what it means for your small business and I helped you define what a small business was. And remember your small business, S corporation, sole proprietorship, LLC, whatever structure that you got outside of being a C corp, you're gonna pay the taxes on your business' profits.

You also get to take advantage, hopefully, of your business losses, if there's, if there, if you have losses. But we're gonna talk about if your company is profitable and what that means for you and the overall impact of your personal tax filing. In regards to the [00:02:00] big beautiful bill. So this has things that apply to everyone that files taxes.

It has things that apply to individuals that file taxes, that own businesses, and it also applies to. Individuals that have family, that dependents in their household, all kinds of great stuff. So let us dive into the big beautiful Bill in regards to your personal taxes. One of the things that is fantastic, it's just wonderful, is that the tax rates for 2025 that were set by the tax.

Cuts and Jobs Act, TCJA, the 10%, 12%, 22%, 24%, 32%, 35%, and 37% tax brackets, they're permanent. Those brackets are permanent, and the one thing about it being permanent, it is also, it makes it permanent that those are standard deductions that increase every year. Long [00:03:00] term that's gonna make a lot of difference for those that are on the lower income levels.

But for business owners, what does that mean for you? That means that you want to make sure, or at least try your best, that you stay in the 24% tax bracket. Now you be, your business may be going like gangbusters and you're making money hand over fist. You drop a, you jump from the 24 to 32% tax bracket.

That's, that's big, right? That's big. That's an 8% jump in taxes that you have to pay. If there are things that you can do with your tax professional to bring you out of the 32% tax bracket and down back to the 24% tax bracket. Plan in advance. Plan in advance, once again, plan in advance. And the reason why I say that three times is because I want you to remember it.

Plan in advance. Now, that's a fourth time. That was a bonus. What does that mean? Well, there's a vast difference [00:04:00] in paying your taxes at 24% and 32%. It's exactly 8%. So for every thou, for every $10,000, it's 8%. That's 800 bucks. It's $800 more that you have the pleasure of paying to the IRS because you moved from the 24% tax bracket to the 32% tax bracket.

The brackets also adjust, right? So for 2025, married, filing jointly is 30,000. Had a household 22,500, single and married filing separate 15,000. Okay? But the bracket itself adjust and changes as well. So if you're married, finally jointly with a $30,000 standard deduction. You need to, your target number is to make less than $206,000 according to your [00:05:00] modified adjusted gross income.

That's where you wanna be. You wanna stay at that 24%, and the reason why you wanna stay at that 24% is 'cause you don't wanna pay that extra $800 per thou 10,000 that you made. The next thing we're gonna talk about is something that's not necessarily business related. It's personal related, is the child and dependent care credit.

It increases effective in 2026. The it increases to 1500 for one child, or 3000 for two or more children. That is up from 1050 and 2100 respectively. I mean that, that's good. I mean, every time you get a little incremental bump, that's great because you add 10 incremental bumps up together and that makes a big bump in my opinion.

Another thing in regards to personal is adoption credits. Is is still fairly high. Phase outs do apply. There's a $5,000 portion of that that can [00:06:00] become refundable, so that's good. The child tax credit itself is raising up from $2,000 in 2025 to 2200, and the refundable amount stays at the 1400 mark.

Phase outs still apply. Your tax professional will be able to calculate that out for you. One of the things that I've had some small business owners do is that they've got their business up and running and going, but then they put, uh, or they have put energy efficient systems, home improvements into their home that also has their home office and stuff like that.

Well, if it's not by December 31st of this year, 2025, and it's not in service. Credit will not be available. So in 2026 going forward, there is no residential clean energy credits. There's no energy efficiency. Home credits for home improvements, solar water heaters, fuel cells, geothermal pumps, battery [00:07:00] storage properties, you know, so that that applies.

Also, the Tesla walls and stuff like that. You're not gonna get credits for having that anymore. I think that's a good thing in regards to our automotive industry, but that's a personal opinion. That's a personal opinion on my part. Others may have a difference of opinion in regards to that. That's fine.

But from a pure ones and zeros point of view, it kind of changes where people are leaning. Business owners are leaning, industries are starting to lean. They may say that they still want to do a series of solar panels on the top of their business. Why? 'cause they wanna reduce their power bill. Perfectly viable and reasonable business decision to spend $80,000 on panels that then are considered an improvement.

You can depreciate it over time, maybe even bonus depreciation. But then you got all of this information kind of saying, oh, do it beforehand. Well, if it's not beforehand, it doesn't apply, but you can still take advantage of it [00:08:00] without necessarily getting tax credits. You don't get federal funding money for doing these solar projects on your business or on your home that has your, that.

Run your business out of you, take advantage of it because in the long term, putting those solar panels on the top of your business reduces your power bill by 50% every year. And then if you're in business and at that location for 15 years, maybe it's a good viable business decision to make. The next thing that's up that in regards to do business is that the standard deductions that I already talked about previous continue to increase.

So if you are looking at standard deduction and you're married filing jointly, you get $31,500 as a standard deduction. If you're single or married filing separate, you get half of that. $15,750. [00:09:00] If you are head of household $23,625, that's great that that is continuing to increase and it becomes kind of set in stone that that standard deduction is going to continue to increase.

Why? Because they permanently got rid of personal. Exemptions, and I never really liked personal exemptions. Um, for a, a variety of reasons. In, in truth, personal exemptions in part made people claim things that they shouldn't have, and they would then get in trouble a couple of years down the road. Well, getting rid of those personal exemptions means that you're not necessarily saying, oh, my cousin who lives with my sibling, I'm gonna claim them as a personal exemption because it helps me on taxes.

It doesn't help them on taxes. Yeah. Don't do that. That, that, that's bad. Right? And I told clients not to do that specifically in times past, well now it doesn't even matter, right? If the, if the dependent lives in your household, take the credit, take [00:10:00] the, the benefit that comes with that. If they're not in your household, please don't do that.

Right? So that is in regards to the standard deduction, one of the things that they are gonna get rid of. Also because of TCJA is the miscellaneous itemized deductions from 2018 to 2025, effective 2026, it becomes permanent. Miscellaneous itemized deductions are going to be a thing of the past. And the reason why I think this is a great idea is it, in my opinion, it almost encouraged people to fib just a little bit.

Just to get a little bit more, just look at a little bit more, and they fib about a couple of thousand of dollars to save themselves, you know, two, 300 bucks on their tax bill or increase their refund by two or $300. But you were still lying. You were fibbing on a federal form. [00:11:00] The amount may come into play, but the first thing that you did wrong is that you fibbed don't do that.

Well, this removes the gray area that people tended to operate in. In regards to miscellaneous itemized deductions, I think it's a good thing. Anything that then gets removed from our tax code or our laws that people get in trouble for because they saw a little bit of an immediate advantage. It's almost like it encouraged them to do so.

People don't necessarily think about the long-term implications of the decisions that they make, and that's, that's one of them. So there were a lot of people in past times that would get audited on that stuff, and then it comes out that they can't prove it, and then they get in trouble. Let's not get in trouble.

They did make it an adjustment in regards to overall limitation of itemized deductions. So if you're in the [00:12:00] 37% tax bracket, make sure you're talking to your tax person because there are some adjustments that are made there that could have significant impact on your tax filing. Now, not all of this stuff is necessarily going to apply to you.

Kind of wanna reiterate that, but a lot of it does. Right? And some of the things that I've talked about so far doesn't necessarily seem like it has a direct business to personal tax filing correlation. But remember, this is all about tax strategies and if you're a business owner, you wanna pay the least amount in taxes.

So take advantage of it in regards to your corporate filing and your personal filing. Do both. Because remember, a hundred dollars here, $200 there, $300 here, and you multiply that by 10, 15, or 20 events, you're saving thousands of dollars every year, that then you could be investing into something that you want to invest in, a passion project, your business, your [00:13:00] kids' education, right?

All of these things you could be investing in rather than paying Uncle Sam and the state their due. Now, for those of you that are in states that don't have state income tax, well, ladi da, you are the fancy ones, but the rest of us that live in states that have income tax, this is important. Every little bit counts, and you don't wanna be caught out by not knowing and not taking advantage of something.

And that's kind of the whole point on this. So to kind of dovetail into that, uh, scholarships, there's a provision in there in regards to scholarships. So those that have kids that get a thousand dollars scholarship from this place get a $250 scholarship for this place, there are provisions now in the tax code that help alleviate the tax liability that is on that.

All right, so make sure that you, you give more information rather than less to your tax preparer. I said that before, I'll say it again. The more information you provide to your tax preparer, the more that they [00:14:00] are able to help you file a proper return. One. The second is, is that if they're a strategist like me, it gives them options in talking to you about what can be done for you.

All right. Mortgage interest deduction. There were limits placed upon mortgage interest deductions based upon the debt that includes home equity loans used to buy, build, or improve on your home. They were going to expire at the end of this year. But in 2026 it now becomes permanent. It is permanent. It is such a benefit.

Now you're saying, well, I live in, let's say example California, and I bought a house and it was $950,000 and I don't get to write off all of my mortgage insurance. Well talk to your strategist. Find out how you can still make that work to your benefit. But for those of you that just have a W2 job [00:15:00] and you've got that mortgage interest right up to 750,000 of debt that you're paying on the interest up to the $750,000 mark is still a deduction for itemizing.

You itemize the deduction. The benefit is, is that you get to take advantage of whichever's greater. Remember we were talking about the, the number increased for the itemized, for the standard deduction. Well, if you have a $31,500 standard deduction because you're married filing jointly, and now you look at it that your mortgage interest is let's say $15,000.

It still applies, but it doesn't hit that threshold of $31,500. You still need $16,500 in deductions. Well, where do you get that? You get that from other things that add to the itemized deduction structure. One of the things that they added in was mortgage [00:16:00] insurance premiums for primary residences.

Potentially now they are deductible. Find out the limits 'cause there are limits on that, but the mortgage insurance premiums are now deductible. These are mortgage premiums that you're paying because you didn't have enough money on the down payment to then the bank saying, I, you don't need to have the mortgage insurance premium.

So look at your situation. So now you get mortgage interest that you get to write off. Let's say it was 15,000, and let's say you paid mortgage insurance premiums and they qualify and it was another $1,500. Okay? So now we're at 16,500 in deductions. You're still not over that. 31,500 credit. Okay? Car loan interest, your W2 per employee.

You now are able to go, you're gonna be able to effective in 2025, deduct up to [00:17:00] $10,000 of qualified car loan interest per year. Subject to phase outs. Almost everything's subject to phase outs, but that means that if you married filing jointly and your. Income is in the 24% tax bracket, so 200,000 or less is kind of that range, so 200,000 or less.

Then you get to write off $10,000 in qualified car loan interest payments that you're paying in total per year. You and your partner both have vehicles. You're paying on a loan in this vehicle's not owned by your business. You get to write off that interest. Let's say that interest falls into, let's say it's just, let's say it's the 10,000.

You got two of 'em, right? And for some reason, neither one of those are owned by the company. Fair enough? So that's 10,000. So that brings us that number up to remember incremental increases $26,500. That still does not [00:18:00] exceed the standard deduction level of $31,500. All right. We go back to the drawing board and we incrementally increase your itemized deductions again by salt.

Now I'm not talking about the salt and pepper that you put on your food. Now I'm not talking about the salt that tastes so great on your fries that are hot and in the bag and while you're driving, you're eating them. No, I'm talking about state and local taxes. Salt, it's an acronym. Salt was because of TCJA was originally set at 10,000.

Married filing jointly. You had to split that 5,000, but it's 10,000 now they've phased it up to 40,000. Politics aside, it's a benefit because if you are in the state of California. You get to write off state and local taxes of up to $40,000. [00:19:00] That means what came out of your W2, what you paid on your DMV registration, what you paid out on your property taxes.

Add 'em up. So let's say you got property taxes of 5,000, right? And then off of your W2, you paid $9,000 in taxes on your W2. This all kind of stays in the same range that we're at, and then on the two vehicles, you get to write off another $500 in DMV renewal. Okay? This may not apply to everybody, but applies to enough that it kind of gives you an idea.

Now your total value is $41,000. $41,000 becomes your new itemized deduction. Your standard deduction is 31,500, and based upon what you've already paid out of your pocket, [00:20:00] you have moved the needle on being able to just have a standard deduction of $31,500 to now having a $41,000 deduction against your income for tax calculation purposes.

Wonderful. That means that on some of the income that you generated. You get to then not have to pay taxes on about $9,000 of that. Well, if you're in the 24% tax bracket, you know, I got my trustee calculator out. I let my screen go dark on my phone. But if you're looking at $9,000 at 24%, that's $2,160 that stays in your pocket.

How can you not want an extra 2020 $100, $2,160 in your pocket to invest into something that you want, a project, your children's education, health savings accounts, education savings accounts, Roth IRAs? Why would you [00:21:00] not want to then take that money and put it into something else? Put it someplace where it'll help you.

Right Now, I know some of those examples, they affect you at different levels of your tax filing, but I'm just throwing it out there that extra $2,000 would've been better in your pocket than paying it in taxes, right? So we've kind of covered that, right? Your personal deduction increases. Well, how does this help you as a small business owner?

Remember the profit from your business plus the W2 that you pay yourself from your business. Becomes your gross income and these things deduct against that. This is a tax strategy that still applies. If you're a person that has a W2 job and you work for someone else, or you have a W2 job and you own the company.

This still applies and it stacks right now, one of the things that you're like, well, what about some other [00:22:00] random things? Well, oh, here's a random thing. If you win $10,000 in gambling and you had $10,000 in expenses, you can only use 9,000 of expenses, so you'll have to be taxed on the thousand dollars.

It's a little bit random, but. Does it apply to you? Probably not, but if it does apply to you, you need to be aware of it, right? Because everything either stacks on top of each other or deducts from your ongoing stack. Alright? One of the things come effective, and this did not exist beforehand in 2026.

Charitable itemized deductions are deductible to the extent that they exceed your adjusted gross income. That didn't exist before. It's something new. You'll want to plan your deductions, plan your charitable donations, but even if you [00:23:00] fall short in your planning. They also included a provision that non itemizes people that take advantage of the standard deduction can still deduct cash contributions of up to a thousand dollars or 2000 if married filing jointly.

You'll still get it, you'll still get that even if you didn't plan out to exceed the floor, the the baseline for a charitable itemized deduction. If you didn't take advantage of being itemized and you're being a standard deduct, you still get advan. You still get a charitable deduction. Wonderful, right?

Whereas in before, if your charitable deductions along with your mortgage and your mortgage in interest, and your state and local taxes of up to 10,000, if you didn't exceed the standard deduction, then your charitable donations didn't have a benefit to you. But now the charitable donations have a benefit.

Stand, even if you're a [00:24:00] standard deduction. And then you need to meet a threshold to then as an itemize to deduct a value. So plan it out. Plan it out. Are some of these numbers difficult? No. Because you can work with estimated numbers and you can even low ball them to a degree. Plan it out. Planet, planet, planet, planet, planet.

I can't stress that enough. Alright, we are moving on to another part. Moving expenses. I get this because I got certain companies that are leaving certain states and going to other places. How can I take advantage of moving from California to another state on my taxes? Unless you're active duty military or certain intelligence employees of certain agencies who move under orders.

There's no deductions, right? There's no deductions, nothing there. But as a company [00:25:00] owner, you can make it easier for your employees to move. And if you own your own company, you employ yourself and the company can help you move. Talk to your accountant, find out what you can, what you can roll in, and have the company pay for it rather than have it come out of your own pocket.

A company pays for it. Fantastic. The company gets to write it off. You pay for it, not as fantastic because you don't get to write it off. Right. It's money that you spend, but it doesn't have a taxable benefit for you. Just be aware of that. Right. That's how I tie it into it being a business related thing as well, because I recently had a company, an entire company, move all of its operations out of one state.

To another state for a variety of reasons, but one of the top ones being tax advantages. And they went through the process, but there were employees that were very hesitant to make the [00:26:00] move with them because of what it would cost them to move. So we worked out a deal and guess what? They retained the employees they wanted to retain and they moved.

And so now. That not only is this business moving, but they're taking, they're taking employees as well to the new state that they're going to, whether it be from California to Nevada, whether it be from Oregon to Idaho. It doesn't matter what state you're going to, right? There are provisions that you can take advantage of to help your business make that transition easier.

Because remember, if you lose employees, it costs you money. Not only at the institutional knowledge that you're losing because that employee's gonna leave, but then you then have to go through the process of hiring someone and training them and there may not be as good as you're the employee that you wanna keep.

Well, here's a way, alright. [00:27:00] There are changes that they made in regards to other things. I think one of the things that people are like, Eric, quickly get to it. No tax on tips. No tax on tips. Wonderful. Effective 2025 to 2028 individuals can deduct up to $25,000 in tip income, qualified tip income from the calculations for their income, which then affects their tax bracket, 25,000.

That's a lot of tip money. I mean, if you think about it, you, you didn't get any benefit beforehand. So everything you get from this point going forward, that's just gravy. So let's say 25,000, right? You break that down on a per month basis, 25,000. We break it down to into 12 months, you're looking at [00:28:00] 2080 $3 a change of tips.

Well, let's say you only work weekends on the job and you make like four or $500 in tips on top of your wage, all of that becomes tax free. That second job that you're working tax free on the tips. Now you as a business owner, are you able to take advantage of that? Talk to your strategist and find out.

'cause remember the term is qualified tip. Income. Nah. Now, is there a phase out for it? Yep. Married filing jointly. 300,000. If you're making over $300,000 and you're working the tip industry, you're doing all right. Not a problem. This isn't necessarily for you, but if you made $50,000 and half of that came from tips, that means you're now taxed at 25,000 that you [00:29:00] can't, you can't beat that.

Your income was 50 and now you're being taxed as if you made 25,000. It's a win. It's a win. It's a win. It's a win. But then you're like, but what about the tax? No tax on overtime. No tax on overtime. There's a qualifying factor to it. It's not nearly as good as tips, but it's still there. If you work enough overtime and you generate.

Let's say $12,000 in overtime pay, and you make under 300,000 already you and your partner married, filing jointly 300,000, 12,500 is the cap that you then get to deduct as qualified overtime pay. You got nothing beforehand. In fact, you got taxed even more on overtime pay than you did on your regular pay.

Now it's a complete 180. You're not getting taxed on it, up to [00:30:00] $12,500 a year. So if you work for a boss, not yourself, and you work four 10 hour shifts and you're getting built in overtime, wonderful. If you work four, uh, five, eight hours shifts, you get your 40 hours and you work a couple hours on the weekend.

Wonderful. You're incentivized now to do it because you're not getting overtaxed on the overtime. You're actually able to just pocket it. So if you get paid overtime two times what your hourly rate is, that entire extra hour goes to your pocket and you don't have to pay taxes on it. No tax on tips, no tax on overtime.

That's how it works out for you. Dependents, dependences Dependences. Most of the time we refer dependents as kids. Kids in your household that are under the age of 17 during the tax filing year. If they turn 18 on [00:31:00] December 31st, you get to take them as a dependent, not a child. So this is for child, child deductions starting in 2026.

A tax free account is available for children under the age of 18. With annual contributions from the parents and others capped at $5,000 a year. Even your employer who employs you, if you own your S corp, you do all right. Could do up to $2,500. Children born between 2025 and 2028 can opt for a one time government contribution of a thousand.

Uncle Sam is gonna give you a thousand dollars tax-free account. For your kid when? When he is born and then in 18 years he gets to cash that in to start his business to pay for college, first year of college, help contribute to being a down on a house. That's [00:32:00] great. The fact that you then can also contribute to it and it is a tax free account for the kiddo that then can grow for the next 17 years.

That's, that's fantastic. Fantastic. Talk about an opportunity where you can put your kids in a position that they can then leave your home with a nest egg to grow with. That sounds fantastic to me. That sounds fantastic to me. A tax free account that starts with a thousand dollars and you can contribute up to $5,000 a year, and as long as they're under the age of 18, so 17 and under.

So let's say you get a thousand dollars when the child is born in 2025, and then between you and the grandparents and aunts and uncles, you get 17 years at $5,000 a year. That's, that's pretty significant just by listening to that number. So now we're looking at. [00:33:00] 17 years at $5,000 a year plus the thousand dollars that was given to you, your kid is gonna have a basis of $86,000 in that account a basis.

And it's been growing either under compound interest or investment interest over the past almost two decades. That's huge. That's huge for your kids. Does it help you on your taxes? No, but it's tax free money for your kids. A little bit of forward thinking goes a long, long way. Take some money aside.

Instead of going to Starbucks four or five days a week, go three. Take that extra $10 per Starbucks trip per week. So it's $20 a week in that example, at 52 weeks in a year. Okay, [00:34:00] that's, that's a little over 1,004. Go make the coffee at home. Stop going to Starbucks entirely, or any of the coffee shops. You stop going entirely and you stop spending $10 a day, five days a week, $50 a week.

Then you got 52 weeks in a year. Well, okay. You get two weeks off because of your, because of your vacation and stuff like that. Okay. All right. But that's still 50 times, 50 is 2,500 bucks. Now you tap grandma and grandpa for that extra 2,500 bucks or the aunts and uncles birthday's coming up. Does the child really need It's 35th?

Does does your young boy need the, it's 35th. His 35th Nerf gun. Or could you get the 40 bucks from the aunt and uncle and put it into this account and then grow it for 10 plus years? That's what strategies are all about. Putting money into your [00:35:00] pocket, saving money for the future, building what you have, building your own financial empire.

Now, is that empire gonna be massive? That's up to you. You have options. You should be trying to take advantage of every single one. Now we're gonna talk about one last item. It's a little bit on the not so fun side, but it applies to us all estate and gift tax. Estate inheritance, right? What? What you get what?

Like what you, what you inherited, right? A estate and lifetime. Gift tax exemption, the amount is 13.99 million 2025. Interest or inflation adjusted reverts back to the 5 million indexed after 2025. But because of the big, beautiful bill, it actually gets rid of [00:36:00] both those sets of numbers and it makes permanent, the increase is 15 million.

It indexes for inflation beginning in 2027. You worked hard to create a good life for you and your family, and your children will be the inheritors of that good life. Whatever you have to leave to them, they can then now receive it without having to pay taxes that maybe you inherited on. A little bit different.

Think ahead, plan ahead. Strategies and planning is not just for your business, it's for your personal. And so that's why I said we're gonna do two sessions, one for the business and crossover to the personal. And this is how it comes together. [00:37:00] Taking advantage of these things is not wrong. We've said it before.

We'll say it again. Melissa was in here, she would be chiming in immediately with the tax system is rigged. It's rigged against you, but there are provisions. There are codes, and there are rules that you can take advantage of, and you can do it incrementally to come out a winner. Now does that mean you get as much money to go to go as many restaurants as you may normally would've done?

No, but. Maybe figure out how to make it a business expense instead, put your money where it needs to be. I mean, in truth, I go out to restaurants and many of 'em I do enjoy and I enjoy it with the family, but nothing compares to me making a three or four course meal for my family at home, truth be told. [00:38:00] So it's all about what you value.

It's all about what you want. And what you wanna spend your money on, take advantage of it. Alright, we're gonna do a brief rundown from the top Individual income tax rates, structures permanent going forward, your standardized deduction, permanent adjusted for inflation going forward, child and dependent care credits, child tax credits increased going forward.

Energy efficiency, home credits, residential clean energy credits gone. Scholarship monies. Okay. Options to not have to pay taxes on those as well. Standard deduction, I know I already talked about it, but I gotta talk about it again. Permanent and it adjusts for inflation base, so the [00:39:00] IRS will put out a new standard deduction every year.

Wonderful. Wonderful itemized deductions for miscellaneous expenses gone. I am not sad to see those go codes and structures that encourage people to lie and then they get in trouble for following that encouragement. I've never agreed with that. All right, we're moving on. Overall limitation on itemized deductions.

If you are in the 37% tax bracket, if you make over, if you make over $750,000, you should be using someone to help you plan someone. On the personal side, on your business side, it don't matter if you make over $750,000 a year, you should be paying someone to help you minimize your taxable liabilities.

Personal exemptions gone. I'm not sad to see those go. Not sad to see those go at all. Mortgage insurance deduction. Mortgage [00:40:00] insurance premiums deduction, car loan interest deductions, increased salt tax deductions, bam, bam, bam. Each one of those a winner. Charitable contributions for non itemizes.

Wonderful percentage floor for itemized charitable contributions. Not awesome, but easily doable. Moving expenses meh. Tax on tips. No tax on tips, no tax on overtime, absolutely wonderful. The Trump account for your child, absolutely fantastic. Why not invest in their future? Invest in your kids. You invest in yourself.

You invest in time into shows that you watch. Invest in the kids. On the flip side, guess who's gonna be taking care of you? When you're a little bit older, your kids get 'em off to a good start. [00:41:00] Estate and gift tax. Leave them something to inherit without paying a bunch of taxes on fan ta dick. All right, I know if I don't mention this, I'm gonna get in trouble from someone.

Enhanced deduction for seniors. It's not a tax strategy. It is not a tax plan. It's just something that they've added in, like the child tax credits, the home childcare credit. Okay? It's just something they added in. You get a $6,000 deduction just for being over 65. There are phase outs. Remember everything.

All of these have phase outs, but if you're on a fixed income and you've got a little side hustle or a part-time job. This extra $6,000 deduction is going to come in handy. If you are retired from a state job and you get a hundred thousand dollars a year and you are married, your partner gets social security and you get social security and stuff like that, [00:42:00] you'll want to take a look at those numbers and make adjustments because you wanna make sure that you are modified, adjusted gross income doesn't exceed the thresholds, that then you start to phase out the $6,000 extra money.

It's extra money. And maybe if you take full advantage of it, grandma, grandpa, aunts and uncles, you take advantage of that $6,000 deduction. Maybe you put it into your niece nephew, grandchild's Trump savings account. All right, full circle on many of those things. I hope that you've enjoyed listening to me solo.

I wish everybody the best of holidays coming up. I know that these episodes will be dropping in the holiday season. I hope that you guys have fantastic holidays Once again, if you need to reach out to us, you can reach out to us on ww dot Busy B Advisors, A-D-V-I-S-O-R s.com. You can [00:43:00] search us up. Reach out to us if you have questions.

If you've listened to us and you wanna take advantage of some of the things that we're talking about, we can help you. If you're listening to some of the things that we're talking about and you go to your tax person, they better be helping you. And if they can't, then you know who you'd reach out to.

Alright, this is Eric with the real Buzz. I wish you all the best of luck. Tax system is rigged. You should take advantage of it. Cheers.

Melissa Broughton: Thanks for listening to the Real Buzz, taking the sting out of taxes. 

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Melissa Broughton: and LinkedIn at Busy Bee Advisors.

Eric Broughton: Thank you.[00:44:00] 

Melissa Broughton: So here's the fine print. The purpose of this episode is for entertainment. You understand, of course, that everyone's tax situation is completely different and that one tax strategy or suggestion cannot be applied in all cases and that they're very well maybe variations. Thanks for listening.