I had one of those nights last night where I just could not sleep. I thought, you know what might help, reading laws. It was actually boring enough to do the job.
Section 60001 to 60026 are about the environment and public works. This part is very simple, they found a place to cut. All monies that have not been spent are canceled and must be returned for the following programs: clean heavy-duty vehicles (like electric or low-emission trucks and buses), Greenhouse Gas Reduction Fund, reduce diesel emissions, fight air pollution, clean up the air in and around schools, Low Emissions Electricity Program, to promote renewable fuels like ethanol and biodiesel, reduce harmful greenhouse gases used in things like air conditioning and refrigeration, improve tools and programs for enforcing environmental laws and sharing information with the public, programs that required companies to report their greenhouse gas emissions, support assistance for environmental product impact reports, methane reduction programs, greenhouse gas pollution plans, support EPA’s review work, low-carbon labeling on building materials, helping communities with environmental and climate justice projects, funds for endangered species recovery plans, gathering environmental and climate information, improving neighborhood access and fairness, federal building assistance, low-carbon building materials in federal projects, support new and sustainable technologies at the General Services Administration, environmental review work and finally low-carbon transportation materials grants. There is some money being spent, $256 million to work on the Kennedy Center. Finally, this section allows sponsors to pay fees to speed up environmental reviews, with clear deadlines and costs.
Now for the fun part, taxes. First, I must admit I have never done my own taxes. My wife will not even allow me to balance the check book. What I am saying is that I am the wrong person to talk to about anything financial. Yet this is one of the parts I was most interested in reading because based on who you listen to this is either a tax break for the rich or for the middle class. Again, take this for what its worth, a non-tax professional trying to read a foreign language. The tax section is broken into several different parts and I am not going to cover everything, just what applies to most. The first part is 70101 to 70120. To start the higher standard deduction amounts from the Trump years are now extended. The goal is to reduce taxable income for more people. You can no longer take a tax deduction for each person in your family to lower taxed income, with the exemption of people over 65, but if you make over $75,000 your deduction is reduced. The Child Tax Credit is increased from $2,000 to $2,200 per child, but you must include Social Security numbers for both the taxpayer and each child to qualify. The business income tax deduction is available to more people by raising income limits and giving small business owners a guaranteed $400 deduction if they earn at least $1,000 and are actively involved in their business. The amount of money you can pass on tax-free when you die (estate tax) or give away during your life (gift tax) is being raised from $5 million to $15 million per person. I had to look up the next part to try to understand it better, the law makes the larger Alternative Minimum Tax (AMT) break permanent, lets it grow with inflation using updated math, but phases it out more quickly for high-income earners. This means wealthier people may pay more in AMT starting in 2026. The cap on how much mortgage interest you can deduct is made permanent, and you can now also deduct mortgage insurance premiums like interest. The new law makes permanent the rule that casualty loss deductions only apply in declared disasters but expands it so you can now deduct losses from state-declared disasters, not just federal ones. Good for Oklahoma tornadoes. Starting in 2026, high-income earners will see a reduction in the value of their itemized deductions, making their tax bills higher. I had no idea this next part was ever in the tax code but gamblers will only be able to deduct up to 90% of their losses, and only if they had gambling winnings. I guess I’m off to the track, anyone want to join. Finally, you can deduct more state and local taxes on your federal return for a few years, but if you make a lot of money, that bigger deduction limit shrinks. After 2029, the limit goes back down to $10,000.
I wanted a new paragraph for this next part so it does not get lost with the rest, I know a lot of teachers. Starting in 2018 many itemized deductions like union dues, work-related expenses, etc. were suspended. While those will remain suspended, teachers, coaches, and school staff can deduct certain work-related expenses. Also, for teachers there is no more dollar limit, deductions apply to non-athletic supplies used in health or physical education, covers coaches and interscholastic sports administrators as well as covers teaching outside the classroom if it’s part of instruction (e.g., field trips, labs, sports events).
The next section is also on taxes and is called tax breaks for the middle class. I am sure many of us are interested in this. I will try to get on it soon, but I need to sleep and my brain hurts again.
