Bulletin Board Magazine [Volume 2 - 2025]

has been maintained. Standard deduction amounts have also been made permanent for tax years after 2024 with $15,750 for single filers, $23,625 for head of household and $31,500 for married joint filers. These amounts too will be adjusted for inflation. A major negotiating point in gathering votes for passing the bill focused on the state and local tax (SALT) provisions. While several alternative suggestions and formulas were debated, in the end we land with a temporary increase to a $40,000 SALT cap beginning in 2025. An adjustment for inflation is added each year of 1% until 2030. Then we see the familiar sunset clause clawing back the SALT cap to $10,000. While the increased cap will provide relief here in New Jersey, the proposals to alter work arounds like Business Alternative Income Taxes (BAIT) and Pass-Through Entity Tax (PTET) calculations were never incorporated into the bill’s final version. The new provision in the bill for no tax on overtime will clearly impact our workforce and our business reporting of W-2s at year end. A temporary above-the-line deduction of up to $12,500 for single filer and $25,000 for joint returns for qualified overtime compensation received by an individual during a given tax year. The deduction has a phaseout when the taxpayers modified adjusted gross income exceeds $150,000 ($300,000 joint). Qualified overtime compensation is defined under Section 7 of the Fair Labor Standards Act of 1938, as the amount earned in excess of the regular rate earned by the employee under that section. An overtime deduction would only be allowed if the total qualified overtime compensation is reported separately on form W-2 to the employee. The deduction is allowed for tax years 2025 through 2028. The “Trump Account” is a program designed to establish a savings program for every child born between January 1, 2025, and December 31, 2028, that is a US citizen and whose parents have social security numbers. The government will place the initial seed deposit of $1,000 plus contributions up to $5,000 deposited each year by parents, grandparents, or family members, etc. These “Baby Bonds” account are anticipated to establish nest egg savings plans for when a child turns 18 may withdraw for (1) higher education expenses, (2) Qualifying post-secondary credentialing, (3) small business or small farm expenses, and (4) first time home purchase. When the individual reaches the age of thirty-one, they have full access to the account and distributions will be taxed at capital gain tax rates. For our industry, the elimination of taxes on tips will have limited impact as would larger topics like adoption credits, car loan interest (final assembly here in the US), dependent care assistance programs and student loan debt discharges. I would advise employers to build on their workplace culture, advocate, and sponsor learning sessions for their employees. Many members in the workforce will see these provisions as significant impacts on their household finances.

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