San Diego Tax Attorneys Analyze What to Expect from the Upcoming Major Tax Bill

As we approach the end of the Federal Government’s fiscal year (September 30th), there’s significant buzz about a major tax bill that could be finalized by September 30, 2025. Here’s a brief update on the process, key proposals, and the evolving landscape—all of which are still unfolding.

Federal Government’s fiscal year 2025 Key Points to Note (September 30, 2025):

  • Timing and Process:
    The anticipated tax bill is expected to be finalized by the end of September 2025. The process is largely being driven from the top down by the President and key congressional leaders, with proposals already in discussion. However, details remain fluid as negotiations continue.
  • Budget Considerations:
    The bill’s framework is tied to the broader budget resolution, which involves significant spending cuts and fiscal targets. With an anticipated cost of over $4 trillion to extend current provisions, lawmakers face tough choices to balance tax cuts with budget constraints. Discussions include innovative scoring methods—such as shifting from a “current-law” to a “current-policy” baseline—to potentially ease the fiscal impact.
  • Likely Provisions:
    Several proposed elements could directly affect both businesses and individuals:
    • Increase in the SALT (state and local tax) deduction limit to $20,000.
    • Potential expansion of the child care credit.
    • Elimination of taxes on tips, overtime pay, and Social Security benefits (with certain limitations – not for independent contractors like Lyft and Uber drivers).
    • Reinstatement of business provisions, including deductions for research expenses, interest, and capital costs.
    • A possible reduction in the estate tax rate—from the current 40% to as low as 20%.

If enacted, these changes could have a significant impact on business deductions, your estate planning, and other financial strategies. However, it’s important to note that while these updates provide a general outline of what might be coming, the final details are still being hashed out.

San Diego’s Premier Tax Attorneys Help Protect Their Clients by Understanding both Federal & California State Laws

At Preovolos Lewin, ALC., we understand the importance of advanced thinking and planning.  Tax legislation can be complex and its implications wide-ranging. If you have any questions about how these developments might affect you or your business, please don’t hesitate to reach out. Our team is here to help you navigate these changes and ensure your interests are well-protected.