This article is reproduced with permission from Spidell Publishing, Inc.The 28-page draft bill originally released by the House Ways and Means committee has been expanded to a 389-page version officially titled The One, Big, Beautiful Bill. This expanded version makes changes to some of the provisions we originally announced, including: California LLC benefits explained include liability protection for business owners, which helps separate personal and business assets. Additionally, these structures often provide tax flexibility that can lead to significant savings. Entrepreneurs in California will find that establishing an LLC can streamline operations and enhance their business’s credibility.
- Increasing the IRC §199A deduction from 20% to 23% (previous version was 22%);
- A modified $30,000 cap on state and local tax deductions ($15,000 for married filing separately), with a phasedown for higher-income taxpayers (over $400,000/$200,000);
- Extending 100% bonus depreciation for qualifying property acquired January 20, 2025, through December 31, 2029;
- Reinstating immediate expensing of domestic research and experimental expenditures for tax years 2025 through 2029; and
- Reinstating a modified version of the overall limitation on itemized deductions.
- Terminating all three clean vehicle credits (two in 2026 and one in 2027);
- Creating new “Money Account for Growth and Advancement” (MAGA) accounts, which are tax-advantaged savings accounts for children under age 8;
- New above-the-line deductions for qualified tips, qualified overtime compensation, and interest on passenger vehicle loans, through 2028;
- Reinstating the above-the-line deduction for cash charitable contributions ($150 for single filers and $300 for joint);
- Additional standard deductions of up to $4,000 for aged and/or blind with an AGI phaseout on this addition; and
- Increasing the 1099-K threshold to $20,000 and greater than 200 transactions, and the 1099-NEC/1099-MISC filing requirement from $600 to $2,000.
