OBBBA Individual 1
Which of the following are occupations that will likely qualify for the tip deduction?
Bartenders
Gambling dealers
CPAs
Tattoo artists
Engineers
Bartenders
Gambling dealers
Tattoo artists
These are all professions where tips are customarily and regularly received
True or false: 529 plan qualified expenses were made stricter under OBBBA
False
OBBBA expanded 529 qualified expenses to include more K-12 and homeschool expenses and postsecondary credentialing expenses
ABC, LLC incurs $400,000 of foreign R&D in 2025. What is the correct treatment of these expenditures?
Capitalize and amortize over 15 years
Domestic R&D is now expense, but foreign R&D is still required to be capitalized
What is the new expense limit and phase-out threshold or §179 in 2025?
$2,500,000 expense limit
$4,000,000 phase-out threshold
Starting in 2026, what is the new flat tax rate for individuals?
2.75%
4797
Sales of Business Property
In 2026, Lucas has gambling income of $3,000 and gambling losses of $2,900. What is the net amount of gambling income that Lucas will be taxed on in 2026?
$390
Winnings = $3,000
Losses = $2,900 * 90% = $2,610
$3,000 - $2,610 = $390
For the new no tax on car loan interest, what are the assembly and loan origination date requirements to take the deduction?
Loan originated after 2024 and final assembly took place in the USA.
XYZ, LLC purchases a new piece of equipment and signs a legally binding contract on January 18, 2025. The asset is delivered and placed in service on January 20, 2025. What is their bonus depreciation % for this new asset?
40%
Since the asset was purchased and a contract was signed prior to January 19, they can only take 40% depreciation on the new equipment
A company constructs a new factory costing $400,000 and places it into service on July 1, 2026. The factory qualifies as qualified production property. What depreciation deduction can the company take in 2026?
$400,000
QPP is eligible for a 100% depreciation deduction in the year it is placed in service
In Ohio, educator expenses deduction increased from $250 to what?
$300
8990
Limitation on Business Interest Expense Under Section 163(j)
What is the new floor for charitable contributions for taxpayers who itemize starting in 2026?
0.5% of AGI
Which of the following were "permanently" terminated in OBBBA?
Personal exemptions
Miscellaneous itemized deductions
Moving expenses deductions (except Armed Forces)
All three were "permanently" terminated
How did the calculation of ATI for purposes of business interest limitation become more favorable for taxpayers under OBBBA?
Depreciation, amortization, and depletion are added back.
What is the new floor for charitable contributions for a C-corp?
1% of taxable income
A C-Corp filing a Pennsylvania return incurs domestic R&D during 2025. This amount is fully deducted on the federal return. What is the correct treatment on their Pennsylvania return?
Add-back and capitalize amount over 5 years
Take a 20% deduction of capitalized cost every year starting in the current year
8863
Education Credits
Alex worked at a retail store for all of 2025. Alex's hourly wage was $14 dollars and did not change at any point during the year. During the year, he worked 200 hours of overtime at 1.5x pay. Assuming his AGI is below any threshold, what amount of overtime wages can Alex deduct on his 2025 tax return?
$1,400
Wages earned on overtime hours = 200 * $21 = $4,200
Ordinary wages portion of overtime hours = 200 * $14 = $2,800
Deductible overtime wages = $4,200 - $2,800 = $1,400
Chuck and Tiffany are married and made a donation of stock valued at $5,000 to a public charity in 2026. They do not have enough other items to take the itemized deduction, so they take they standard deduction for the year. What amount can they take as a below the line deduction as a non-itemizers' charitable deduction?
$0
The non-itemizers' charitable deduction is for cash contributions. Had these contributions been cash, they could have taken up to $2,000 as a deduction.
Fill in the blanks:
Under OBBBA, the new tiered deduction system for Qualified Small Business Stock is as follows:
__% if held for at least three years but less than four
__% if held for at least four years but less than five
__% if held for at least five years
50% if held for at least three years but less than four
75% if held for at least four years but less than five
100% if held for at least five years
Why would the following property not qualify as QPP?
Construction began December 28, 2024, was placed in service on March 5, 2027, and cost $750,000
Construction must begin on or after January 20, 2025.
For a Michigan filer, what is the 2025 expense limit and phase-out threshold for §179?
$1,220,000 expense limit
$3,050,000 phase-out threshold
8839
Qualified Adoption Expenses
Ben and Jennifer, a married couple, paid $60,000 in state and local taxes in 2025, and will be itemizing on their return. Their MAGI for 2025 is $550,000. What is their SALT deduction for the year?
$25,000
New cap is $40,000
Phase out range is $500,000 to $600,000
Deduction is lowered by 30% of the excess income
$550,000 - $500,000 = $50,000 * 30% = $15,000
$40,000 - $15,000 = $25,000
At what AGI does the new senior deduction start to phase out for MFJ filers?
$150,000
What is the new minimum deduction for QBI?
$400
A company has self-constructed property that was placed into service on April 1, 2025. The project began in December of 2024. The total costs for the project ended up being $400,000. The breakup of costs per month are as follows:
December 2024: $1,000
January 2025: $2,000
February 2025: $40,000
March 2025: $120,000
April 2025: $237,000
What is the company's bonus % percentage for the self-constructed property?
100%
Although this project began before January 19, 2025, more than 90% of the costs occurred afterward, therefore the property still qualifies for 100% bonus
Section 250 Deduction for Foreign-Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI)