Big Beautiful Bill Part VI-Middle Class Tax Cuts

I thought I might as well jump into the next part as it is some of the parts that Trump has been touting.

This is section 70201 to 70204. If you are paid in tips like a bartender, waitress, or hairdresser, your tips will no longer be taxed up to $25,000. However, if you make over $150,000 your reduction is reduced. There are a few rules. It must be a job where tipping was common before 2024, in other words you can’t be a consultant and now call your fees a tip. Must have a SS number. Married couples must file jointly to use this deduction and together can’t exceed $300,000. Finally, Businesses like barbershops, nail salons, spas, and similar services can now claim a tip tax credit like restaurants already could. The next promise is starting in 2025, overtime pay up to $12,500 will be tax-deductible for most workers. Like before this deduction starts phasing out if your income is over $150,000 and as always you must have a SS number. Next promise is if you buy a brand new car (not just new to you) for personal use and take out a loan to do it, you can deduct the interest you pay on that loan from your taxable income up to $10,000. Like the others, the deduction is reduced if you earn more than $100,000. Finally, this section creates Trump Accounts (yes named after himself) that are special savings accounts created for kids under age 18. There are some rules, can only invest in low-fee stock market index funds (like S&P 500), no money can be taken out until the child turns 18 (with some exceptions), contributions are limited to $5,000 per year, per child.

That is enough for today, I should have included this section in the past one as the next section gets into business taxes and I don’t have the mental capacity to start that today.