The Q1 Doc Wealth Newsletter

State and Local Tax (SALT) deductions saw a big boost. For 2025 through 2029, the SALT deduction cap jumps from the previous $10,000 limit to $40,000 for married couples (less for single filers), with slight annual increases. As a result, more taxpayers may itemize their deductions going forward.

High earners note: if your modified adjusted gross income exceeds roughly $500,000 ($250,000 if married filing separately), this higher cap begins to phase down by 30 cents for each dollar above the threshold, but not below $10,000.

To maximize the $40K cap, higher earners may benefit by keeping modified adjusted gross income below the applicable phaseout thresholds.

A tax advantaged savings account for children has been created, informally dubbed “Trump Accounts.” Starting in 2026, parents or others can contribute up to $5,000 per year per child, after tax, into an account that grows tax free until the child turns 18. No withdrawals are allowed until age 18, at which point the account converts into the child’s retirement IRA, with distributions taxed at the child’s rate.

For children born 2025 through 2028, the federal government kickstarts the account with a $1,000 one time contribution. Accounts become available for establishing and depositing funds starting July 4, 2026.

Good news for practice owners and 1099 contractors: the Qualified Business Income deduction, the 20% write off for pass-through business profits, is here to stay. The new law made it permanent beyond its original 2025 expiration, so S-corp, partnership, and sole-proprietor income keeps the break. Starting in 2026 there are expanded income thresholds.

Certain businesses, including services in healthcare, law, accounting, financial services, and consulting, are Specified Service Trades or Businesses (SSTBs). Once taxable income reaches certain thresholds, income from these businesses is ineligible for the QBI deduction.

The phaseout range widened by 50%. For joint filers it now runs roughly $394K to $545K of income, and a small $400 minimum deduction applies for those with at least $1,000 of business income. That creates an incentive for SSTB owners to keep taxable income below the phaseout thresholds.

Families with children will see a slightly larger credit per qualifying child. The Child Tax Credit is now $2,200 per child, up from $2,000, and was made permanent with annual inflation adjustments. The eligibility phaseout remains at $200,000 for single filers and $400,000 for joint filers, which means higher earning physician families may not qualify for the full credit.

If you are financing a new car, you can benefit from a temporary deduction for personal auto loan interest. Interest on a new vehicle loan, for a car, SUV, or motorcycle, is deductible up to $10,000 per year. To qualify, the vehicle must be for personal use, assembled in the U.S., and you will need to list the VIN on your return.

The write off is available for 2025 through 2028 and begins to phase out above roughly $100K single or $200K joint.

Education savings have become more flexible. You can now use up to $20,000 from a 529 plan for K–12 schooling costs, doubling the old $10K limit for private elementary or high school tuition.

The definition of qualified expenses has broadened as well. 529 funds can cover not just tuition but related K–12 expenses like books, online materials, tutoring, and even certain costs for post-secondary credentials or continuing education programs. Families with 529 college savings plans have new options to use those funds tax free for earlier education needs or career-related learning.

A new above-the-line deduction rewards charitable giving even if you take the standard deduction. Beginning in 2026, taxpayers can deduct cash donations to charity up to $1,000 if single or $2,000 if married filing jointly without having to itemize. Donations of property still require itemizing.

This change is great for generous givers who previously got no tax benefit when using the high standard deduction.

The tax law eases certain reporting requirements for freelancers and small business transactions. Starting with 2025, third party payment platforms like Venmo and PayPal will only send a Form 1099-K if your gross payments exceed $20,000 and 200 transactions in the year, reversing the brief attempt to lower that threshold to $600. For independent contractor work, the annual threshold for issuing a Form 1099-NEC or 1099-MISC jumps from $600 to $2,000 in 2026.

You are still required to report all taxable income. These higher thresholds mean less paperwork and fewer forms, not less tax.

If you are considering an electric vehicle or home energy upgrade, be aware of new timing rules. The Electric Vehicle tax credits, for new purchases, used purchases, and commercial EVs, are ending early and are unavailable for any vehicle bought after September 30, 2025. That effectively sunsets the federal $7,500 EV credit sooner than expected.

Residential clean energy incentives are winding down as well. Credits for home solar panels and energy efficient improvements are no longer available for projects after 2025. Clients who acted before the deadline can still claim the credit for 2025.

For those paying daycare, nanny, or elder care expenses so you can work, the Child and Dependent Care Credit gets a boost effective 2026 onward. The credit can now cover up to 50% of eligible care expenses at lower income ranges, up from 35%, and the benefit phases down more gradually as income rises. Even at higher incomes you will still get at least a 20% credit, with the top phaseout threshold roughly doubled to over $200K for joint filers.

The dollar limits for expenses are unchanged at $3,000 for one dependent or $6,000 for two or more, but many middle and higher income families will see a larger credit, or keep the full 20% at incomes where it previously would have dropped.