Tax laws and policy updates continue to play a critical role in shaping financial strategies for both individuals and businesses. As we move into the second half of 2025, staying informed about proposed legislation, regulatory shifts, and ongoing tax debates is more essential than ever. These developments can significantly affect your ability to remain compliant, optimize deductions, and plan effectively for the future. At Scout Tax, we’re closely tracking the latest US Tax News to ensure you’re updated in real time and fully equipped to adjust your financial approach with confidence.
For Business Owners
Stay informed on key tax changes affecting LLCs, S-corps, sole proprietors, and other small business entities. US Tax News continues to highlight developments that could impact your deductions, compliance needs, and future planning. Whether you’re planning for growth, evaluating risks, or simply trying to stay compliant, having up-to-date knowledge can directly influence your business outcomes and bottom line. Understanding these updates will help you anticipate challenges, take advantage of incentives, and adjust your tax strategies accordingly.
1. QBI Deduction Increase:
An important change is coming for those utilizing the Qualified Business Income deduction, aimed at enhancing benefits for pass-through entities.
- Current Rule: 20% deduction on qualified business income.
- Proposed Change (Effective 2026): Permanent increase to 23%.
- Who Benefits: Pass-through entities such as LLCs, S-corporations, and sole proprietors.
2. R&D Expense Capitalization (Section 174)
Ongoing rules on research and development costs require careful planning. Understand the capitalization periods and the uncertain legislative future.
- Current Requirement: Capitalize and amortize research and development expenses over:
- 5 years for domestic R&D
- 15 years for foreign R&D
- Status: Despite bipartisan support for repealing or delaying this rule, no changes have been finalized.
3. Tax Concerns Surpassing Other Business Challenges
Taxes have increasingly become the leading concern for small business owners, as a result of mounting anxiety over policy ambiguity and heightened IRS enforcement. Consequently, many entrepreneurs are growing more apprehensive about rising compliance costs, potential operational disruptions, and the uncertainty surrounding long-term financial planning.
- Survey Insight: Taxes are now ranked as the top concern among small business owners, overtaking inflation and labor shortages.
- Key Issues:
- Uncertainty about available deductions
- Complex compliance requirements
- Increased IRS scrutiny and enforcement
4. Foreign Income & Proposed “Revenge Tax”
New proposed measures targeting foreign investors could affect U.S. businesses with international ties or global supply chains.
- Proposal: A surtax ranging from 5% to 20% on foreign investors from countries with discriminatory tax policies toward U.S. businesses.
- Potential Impact: Could deter foreign investment and strain global partnerships and supply chains.
5. Special Carve-Out Controversy
Amid growing public scrutiny, a wave of concern is mounting over selective tax exemptions, which are increasingly viewed as inequitable. This rising sentiment is fueling debates about fairness in the tax code, debates that not only highlight deep societal divides but also carry the potential to reshape future legislation. As a result, investor confidence may waver, with long-term implications for economic stability and public trust in financial governance.
- Case in Point: A $75 billion hedge fund received a tax exemption in the Virgin Islands.
- Public Response: This has raised serious concerns over fairness and transparency in federal tax policy.
For Individual Taxpayers
From credits to deductions, these updates are especially relevant to families, homeowners, high earners, and estate planners. Don’t miss your opportunity to plan. These changes reflect shifts in federal policy that could reshape how individuals file, claim, and save money. Whether you’re budgeting for childcare, making estate plans, or investing in energy-efficient vehicles, staying on top of these updates can ensure you’re making informed, tax-smart decisions.
1. SALT Deduction Expansion:
An increased cap could provide meaningful relief for residents in high-tax states, pending the proposed change taking effect in 2025.
- Current Cap: $10,000
- Proposed Cap (Effective 2025): $40,000 for households earning under $500,000
- Key Benefit: A significant boost for residents in high-tax states such as California, New York, and New Jersey.
2. Child Tax Credit Increase
According to US Tax News, the child tax credit is expected to increase for eligible families starting this year. As a result, more families may find relief when managing rising household and childcare expenses. The proposed extension will likely remain in effect through 2028, offering sustained support over the next few years. This development highlights ongoing legislative efforts to ease financial burdens for working parents across the country.
- Current Amount: $2,000 per child
- Proposed Amount: $2,500 per child, extended through 2028
- Refundability: Fully refundable for eligible households
3. Estate & Gift Tax Exemption Increase
Wealth transfer planning may benefit from higher exemption thresholds. Take note if you’re planning long-term legacy strategies.
- Current Exemption: Approximately $13.6 million per individual
- Proposed Exemption (Effective 2026): $15 million per individual or $30 million for couples
- Purpose: Aimed at aiding high-net-worth families with long-term estate planning.
4. Clean Vehicle Credit Ending Soon
US Tax News reports that the $7,500 electric vehicle tax credit may soon become unavailable. If you’re considering an EV purchase, acting quickly could help you secure the full credit. The widely used incentive is currently scheduled to phase out by the end of this year. This change may influence both affordability and demand across the electric vehicle market.
- Current Incentive: $7,500 EV tax credit
- Timeline: Expected to phase out by the end of 2025
- Exception: Manufacturers who haven’t yet reached the 200,000 vehicle sales cap
5. Increased IRS Enforcement
A stronger IRS budget means more audits and oversight, particularly for high earners, crypto users, and those with complex tax filings.
- IRS Budget Growth: Resulting in enhanced enforcement efforts
- Higher Audit Risk For:
- High-income earners
- Cryptocurrency investors
- Taxpayers with complex deductions or foreign income
Need Expert Tax Guidance?
With evolving tax regulations and increased enforcement, staying ahead is more important than ever. Scout Tax is here to help you navigate these updates with confidence. From strategic tax planning to compliance support, we offer expert solutions tailored to your needs.
