Robert A. DeLellis, CPA

01/03/2026

Have you heard that the One Big Beautiful Bill Act includes a new deduction for interest on vehicle loans? Here are some details.

Passenger vehicle loan interest deduction guidance released (12-31-25)

Proposed regulations clarify the eligibility requirements for the new IRC §163(h)(4) deduction for interest paid on qualified passenger loan vehicles purchased for personal use that is available for the 2025 through 2028 tax years. (REG-113515-25) The deduction is capped at $10,000 annually and is subject to phaseout for taxpayers with modified AGI above $150,000 ($250,000 MFJ). One of the requirements for the deduction is that the original use of the vehicle must commence with the taxpayer.

Highlights of the proposed regulations clarify that:

Only an individual, decedent’s estate, nongrantor trust, or disregarded entity (e.g., nongrantor trust or SMLLC) owned by one of these taxpayers can claim the deduction (assuming the other requirements are met);
The personal use requirement is met if at the time of purchase the taxpayer estimates that the vehicle will be used more than 50% of the time for personal use. Taxpayers do not have to reevaluate the personal use requirement in subsequent years. For disregarded entities the determination is made at the owner level, and for estates and trusts this is determined based on the expected use by the heirs or beneficiaries;
A taxpayer that uses a vehicle partially for business use can choose to deduct the interest as a business expense, but must reduce the auto loan interest deduction claimed on Schedule 1-A by the amount of business interest claimed;
The $10,000 limit applies per return, so MFJ filers are limited to a $10,000 deduction, while taxpayers who file MFS would be entitled to up to $10,000 per spouse;
Interest attributable to amounts directly related to the purchase of the vehicle (e.g., vehicle service plans, extended warranties, sales taxes, and vehicle-related fees) qualifies for the deduction; and
Although interest paid on refinanced loans qualifies for the deduction, the deduction is limited to interest paid on the outstanding balance of the refinanced loan as of the date of the refinancing.

12/11/2025

Our December tax newsletter is available on our website here:

07/22/2025

Here is an article from my monthly newsletter about the One Big Beautiful Bill Act.
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Key Tax Law Changes for Individuals and Businesses Under the OBBBA
On July 4, President Trump signed into law the far-reaching legislation known as the One, Big, Beautiful Bill Act (OBBBA). As expected, it extends and enhances many of the tax breaks from the Tax Cuts and Jobs Act (TCJA). It also includes several of Trump's campaign promises — though many are only temporary — and eliminates tax breaks related to clean energy. Here's a rundown of some of the main tax law changes to be aware of as you plan for the 2025 tax year.

Highlights for Individuals
-Makes permanent the TCJA's individual tax rates of 10%, 12%, 22%, 24%, 32%, 35% and 37%,
-Makes permanent the near doubling of the standard deduction, plus for 2025 increases it to $15,750 for single filers, $23,625 for heads of households, and $31,500 for joint filers, with annual inflation adjustments going forward,
-Makes permanent the higher child tax credit, plus for 2025 increases it to $2,200, with annual inflation adjustments going forward,
-Temporarily increases the limit on the deduction for state and local taxes (the SALT cap) to $40,000 for 2025, with a 1% increase each year through 2029, after which the $10,000 limit will return,
-Expands the allowable education expenses that can be paid with tax-free Section 529 plan distributions, beginning July 5, 2025, or Jan. 1, 2026, depending on the type of expense,
Permanently increases the federal gift and estate tax exemption amount to $15 million for individuals and $30 million for married couples beginning in 2026, with annual inflation adjustments going forward,
-For 2025–2028, creates a new deduction of up to $25,000 for tip income in certain industries, subject to income-based phaseouts,
-For 2025–2028, creates a new deduction of up to $12,500 for single filers or $25,000 for joint filers for qualified overtime pay, subject to income-based phaseouts,
-For 2025–2028, creates an above-the-line deduction of up to $10,000 for qualified passenger vehicle loan interest on the purchase of certain American-made vehicles, subject to income-based phaseouts,
-For 2025–2028, creates an additional deduction of up to $6,000 for taxpayers age 65 or older, subject to income-based phaseouts, and
Eliminates clean energy tax credits, generally after 2025, such as the energy-efficient home improvement and residential clean energy credits — but eliminates the clean vehicle credits for both new and used vehicles after Sept. 30, 2025.

Highlights for Businesses:
-Makes permanent and expands the 20% Sec. 199A qualified business income (QBI) deduction for owners of pass-through entities (such as partnerships, limited liability companies, and S corporations) and sole proprietorships.
-Makes bonus depreciation permanent and increases it to 100% for qualified new and used assets acquired after January 19, 2025,
-Increases the Sec. 179 expensing limit to $2.5 million and the expensing phaseout threshold to $4 million for 2025, with annual inflation adjustments going forward.
Permanently allows the immediate deduction of domestic research and experimentation expenses (retroactive to 2022 for eligible small businesses), and
-Eliminates clean energy tax incentives, such as the alternative fuel vehicle refueling property credit and the Sec. 179D deduction for energy-efficient commercial buildings after June 30, 2026 — but eliminates the qualified commercial clean vehicle credit after Sept. 30, 2025.

How Will You Be Affected?
While this list may seem extensive, it represents just a sampling of the tax changes included in the 870-page OBBBA. Contact the office with questions about how the new law will affect you.

02/26/2023

The IRS announced on 02.24.23 that the due dates have been extended for taxpayers in disaster areas in CA, AL & GA until October 16, 2023.

IR-2023-33, Feb. 24, 2023 — Disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Previously, the deadline had bee...

01/13/2023

The IRS has extended some due dates for the CA counties listed below:

IRS grants filing extensions to California storm victims (01-11-23)

The IRS is granting extensions to California storm victims until May 15, 2023, for the following filing and payment deadlines that were normally scheduled for on or after January 8, 2023:

Individual income tax returns;
Business return filings normally due between March 15 and April 18, 2023;
Third and fourth quarter estimated tax payments due on January 17, 2023, and April 18, 2023. Individual taxpayers can skip making the fourth quarter estimated tax payment and instead include it with the 2022 return as long as the return is filed on or before May 15, 2023;
IRA and health savings account (HSA) contributions; and
Quarterly payroll and excise tax returns, normally due on January 31, 2023, and April 30, 2023.
In addition, penalties on payroll and excise tax deposits due on or after January 8, 2023, and before January 23, 2023, will be abated as long as the tax deposits are made by January 23, 2023.

The relief is automatically available to taxpayers who reside or have a business in the following counties:

Colusa Merced San Diego Sonoma
El Dorado Monterey San Joaquin Stanislaus
Glenn Napa San Luis Obispo Sutter
Humboldt Orange San Mateo Tehama
Los Angeles Placer Santa Barbara Ventura
Marin Riverside Santa Clara Yolo
Mariposa Sacramento Santa Cruz Yuba
Mendocino San Bernardino Solano
The IRS will also work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Such taxpayers should contact the IRS at (866) 562-5227.

We are awaiting confirmation from the FTB as to whether California will conform to this extension. We will send out another Flash E-mail once we receive confirmation.

The IRS news release is available at:

www.irs.gov/newsroom/irs-california-storm-victims-qualify-for-tax-relief-april-18-deadline-other-dates-extended-to-may-15