{"id":477683,"date":"2025-12-29T13:16:07","date_gmt":"2025-12-29T13:16:07","guid":{"rendered":"https:\/\/www.europesays.com\/us\/477683\/"},"modified":"2025-12-29T13:16:07","modified_gmt":"2025-12-29T13:16:07","slug":"tax-changes-loom-large-for-us-economy-in-2026","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/477683\/","title":{"rendered":"Tax changes loom large for US economy in 2026"},"content":{"rendered":"<p>Dec  29 (Reuters) &#8211; Economists see the tax cuts in Trump&#8217;s One Big Beautiful Bill as a principal driver of the <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/sustainability\/sustainable-finance-reporting\/us-economy-ride-tax-cut-tailwind-faces-risks-2025-12-29\/\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">U.S. economy in 2026<\/a>, both for individuals and businesses. Here&#8217;s some detail about what&#8217;s in store.INDIVIDUAL TAX CUTS<\/p>\n<p>A range of changes in individual tax rates and breaks could boost household war chests in early 2026 through a combination of larger refunds during the filing season and larger take-home income as paycheck withholding levels are reset to account for the changes.<\/p>\n<p data-testid=\"promo-box\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__promo-box__hVl8h\"> Sign up  <a data-testid=\"Link\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.reuters.com\/business\/finance\/tax-changes-loom-large-us-economy-2026-2025-12-29\/undefined?location=article-paragraph&amp;redirectUrl=%2Fbusiness%2Ffinance%2Ftax-changes-loom-large-us-economy-2026-2025-12-29%2F\" class=\"text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC\" target=\"_blank\" rel=\"noopener\">here.<\/a><\/p>\n<ul class=\"article-list-module__unordered__aLEL9 article-list-module__disc__XcBxE article-body-module__paragraph__Ts-yF article-body-module__list__G8QPC\" role=\"list\" data-testid=\"unordered-0\">\n<li>The law makes permanent the lower individual and business income tax rates in Trump&#8217;s 2017 Tax Cuts and Jobs Act that were due to expire at the end of the year. It also extends the standard deduction in that law and extends and expands the alternative minimum tax exemption and raises the estate tax exemption from $14 million to $15 million.<\/li>\n<li>Exempts taxes on up to $25,000 in tipped income until 2029. This tax break phases out for people who earn more than $150,000 and does not apply to all tips &#8211; for example, automatic service charges applied to large groups at restaurants are excluded, as are tips received for &#8220;pornographic activity.&#8221;<\/li>\n<li>Exempts taxes on up to $12,500 in overtime pay until 2029. Like the tipped income break, this phases out for people who earn more than $150,000.<\/li>\n<li>Creates a new deduction of up to $6,000 for people age 65 and older until 2029<\/li>\n<li>Creates a tax break for up to $10,000 in interest payments on auto loans until 2029. This only applies to personal vehicles assembled in the United States.<\/li>\n<li>Expands the deduction for state and local tax (SALT) payments from $10,000 to $40,000 until 2029. This tends to benefit affluent homeowners in high-tax states like New York and New Jersey.<\/li>\n<\/ul>\n<p>BUSINESS TAX BREAKS<\/p>\n<p>The business tax changes are substantially geared toward providing incentives for businesses to invest in their enterprises, both through the extension of lower tax rates and bigger write-offs for capital expenditures and research and development spending.<\/p>\n<ul class=\"article-list-module__unordered__aLEL9 article-list-module__disc__XcBxE article-body-module__paragraph__Ts-yF article-body-module__list__G8QPC\" role=\"list\" data-testid=\"unordered-0\">\n<li>Makes permanent the lower corporate tax rates from the 2017 law, which were due to expire.<\/li>\n<li>Allows full expensing for certain equipment purchases, which would enable businesses to immediately deduct the full cost from their taxable revenue. This tax break had started to phase out in 2023 and was due to fully expire in 2027.<\/li>\n<li>Allows full expensing of U.S.-based R&amp;D costs. Small businesses also would be allowed to retroactively deduct the R&amp;D expenses they have incurred since 2022. Independent tax experts say the R&amp;D and equipment breaks are among the most effective types of tax cuts to boost economic growth.<\/li>\n<li>Loosens limits on interest deductions. The 2017 tax law allowed deduction of net interest costs up to 30% of earnings before interest, taxes, depreciation and amortization (EBITDA), but this was tightened to only apply to EBIT starting in 2022. That break is now broadened to include amortization costs as well.<\/li>\n<li>Extends and increases a tax break for owners of &#8220;pass-through&#8221; businesses. This would allow a broad category of businesses that includes freelancers, family-owned restaurants, law firms, medical practices, hedge funds and private-equity firms to deduct up to 20% of their income, lowering their effective tax rate. Independent experts are divided on the effectiveness of this tax cut, with the nonpartisan Tax Policy Center saying there is little evidence that it boosts economic growth.<\/li>\n<\/ul>\n<p data-testid=\"SignOff\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__full_width__kCIGb body-module__extra_small_body__Bfz20 sign-off-module__text__LQAMP\">Reporting by Andy Sullivan;<br \/>\nEditing by Dan Burns and Diane Craft<\/p>\n<p data-testid=\"Body\" dir=\"ltr\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__small__sph8i body-module__base__o--Cl body-module__small_body__gOmDf article-body-module__element__5eCce article-body-module__trust-badge__5mS3f\">Our Standards: <a data-testid=\"Link\" target=\"_blank\" referrerpolicy=\"no-referrer-when-downgrade\" href=\"https:\/\/www.thomsonreuters.com\/en\/about-us\/trust-principles.html\" rel=\"noopener\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__medium__2Rl30 text-module__small__sph8i link-module__link__INqxZ link-module__underline_default__-okuC link-module__with-icon__qlg76\">The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n<p><a href=\"https:\/\/www.reutersagency.com\/en\/licensereuterscontent\/?utm_medium=rcom-article-media&amp;utm_campaign=rcom-rcp-lead\" target=\"_blank\" dir=\"ltr\" class=\"button-module__link__A3sD0 button-module__secondary__70gBu button-module__round__QDFgq button-module__w_auto__Sem-F\" data-testid=\"LicenceContentButton\" rel=\"noopener\">Purchase Licensing Rights<\/a><a data-testid=\"AuthorBioImageLink\" class=\"author-bio-module__author-image__jcaG3\" href=\"https:\/\/www.reuters.com\/authors\/andy-sullivan\/\" referrerpolicy=\"no-referrer-when-downgrade\" tabindex=\"-1\" target=\"_blank\" rel=\"noopener\"><\/a><\/p>\n<p data-testid=\"Body\" class=\"text-module__text__0GDob text-module__dark-grey__UFC18 text-module__regular__qJJtA text-module__extra_small__8Buss body-module__base__o--Cl body-module__extra_small_body__Bfz20 author-bio-module__description__9ynkB\">Andy covers politics and policy in Washington. His work has been cited in Supreme Court briefs, political attack ads and at least one Saturday Night Live skit.<\/p>\n","protected":false},"excerpt":{"rendered":"Dec 29 (Reuters) &#8211; Economists see the tax cuts in Trump&#8217;s One Big Beautiful Bill as a principal&hellip;\n","protected":false},"author":3,"featured_media":477684,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5122],"tags":[5229,216147,216193,216397,216409,216152,216410,216411,216404,216412,216215,216164,216403,216153,216398,55855,216396,67458,101727,31647,165856,59960,216399,216400,4630,127860,216149,405,403,5226,5225,216395,216407,216406,5228,5227,216405,216155,216401,165860,33106,216402,216408,67,586,132,5230,68,2969,83854],"class_list":{"0":"post-477683","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-new-york","8":"tag-america","9":"tag-amers","10":"tag-bisv","11":"tag-cen","12":"tag-destlita","13":"tag-destocatpm","14":"tag-destogov","15":"tag-destopub","16":"tag-destortao","17":"tag-destotax","18":"tag-destousbsm","19":"tag-destousdnm","20":"tag-destouspom","21":"tag-destoustpm","22":"tag-eci","23":"tag-eco","24":"tag-fbox","25":"tag-fin","26":"tag-fins","27":"tag-gdp","28":"tag-gen","29":"tag-int","30":"tag-invbis","31":"tag-invm","32":"tag-legal","33":"tag-mce","34":"tag-namer","35":"tag-new-york","36":"tag-new-york-city","37":"tag-newyork","38":"tag-newyorkcity","39":"tag-nrlinogov","40":"tag-nrlpaopub","41":"tag-nrlpaotax","42":"tag-ny","43":"tag-nyc","44":"tag-packageus-politics","45":"tag-packageus-top-news","46":"tag-plcy","47":"tag-pol","48":"tag-potus","49":"tag-pve","50":"tag-reuters-legal","51":"tag-united-states","52":"tag-united-states-of-america","53":"tag-unitedstates","54":"tag-unitedstatesofamerica","55":"tag-us","56":"tag-usa","57":"tag-wash"},"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/477683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=477683"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/477683\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/477684"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=477683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=477683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=477683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}