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The following presentation by New England Capital Financial Advisors, LLC (“NECFA”) is intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from NECFA or any other investment professional of your choosing. Please see additional important disclosure at the end of this penetration. A copy of NECFA’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.newenglandcapital.com.
One Big Beautiful Bill A Closer Look at Two Major Tax Changes
Hi, Matt Carreras here with New England Capital. Back on July 4th, the President signed into a law the One Big Beautiful Bill which, as you might expect, is very broad and contains many changes to tax and other laws. Today I’m going to focus on just two of the many tax law changes – the new standard deductions and a new deduction for those 65 or older.
When the Tax Cuts and Jobs Act was passed in 2017, it dramatically increased the standard deduction that taxpayers are allowed to take and made it so attractive that very few taxpayers – less than about 15% -- actually itemize deductions nowadays.
The new law increases those standard deduction immediately by $750. As you can see, the new standard deduction for single filers is $15,750 and for married couples is $31,500.
There is still an additional deduction available to those who are over 65 or blind… and those amounts stayed the same.
The new 65 and over deduction in the July 4th law is $6,000 for single filers and $12,000 for those married filing jointly and that is added on top of the other deductions… which is good news. But … there are some limitations that I’ll get into.
Also, I wanted to mention that this was described in White House and Social Security Administration communications as being a tax break on Social Security, but this is actually a general tax deduction available to anyone who qualifies. It isn’t tied specifically to Social Security income… and it’s available whether you use the standard deduction or itemize.
So, who qualifies for this new $6,000 deduction? Well first, no surprise, you must have turned 65 before the end of the year. This new deduction is also limited to people below a specific income because the benefit starts phasing out at $75K of modified adjusted gross income for single filers and $150K for married couples. If you’re income is $100,000 above those thresholds – more than $175,000 for singles and $250,000 for couples, then this deduction is completely phased out.
One last thing to point out…. This new over 65 deduction is not permanent and will be going away after 2028.
As I mentioned at the beginning, there are many tax law changes in this new bill and this is just two of them. Call or email us anytime to let us know what questions you have either about the bill or your own situation.
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Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by New England Capital Financial Advisors, LLC [“NECFA”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from NECFA. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. NECFA is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the NECFA’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.newenglandcapital.com. Please Note: NECFA does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to NECFA’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a NECFA client, please contact NECFA, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.