Dear clients,

I want to take a moment to share some important news that could really make a difference for you, your business, and your bottom line. As you know, the President signed a new law called the One Big Beautiful Bill Act on July 4^th.

What This Means for Our Small Business Clients:

If you own or run a small business, this new law offers some great news. Full bonus depreciation is restored, so businesses can now fully deduct the cost of new equipment and certain improvements to non-residential property right away, improving near-term cash flow and internal rate of return. Plus, the limits for Section 179 deductions have been raised, giving you more flexibility and more immediate savings when you invest in your business. Also, the 20% qualified business income deduction is now permanent, improving cash flow and could help with debt service coverage.

What This Means for Our Individual Clients:

For individuals and families, the tax brackets we’ve grown used to are now permanent. That means no surprise tax hikes down the road. The higher standard deduction amounts remain permanent—$31,500 for married couples and $15,750 for singles (these amounts will adjust for inflation). Families can claim $2,200 per child (up from $2,000), and this amount will also increase with inflation going forward. For the next few years, you can deduct up to $40,000 in state and local taxes if you’re married filing jointly (which is up from the current $10,000 limit). This will gradually phase out for higher earners.

For some, other benefits may include:

• No Tax on Tips: If you work in a job where tips are customary, you can deduct up to $25,000 in tip income per year through 2028.
• No Tax on Overtime: Overtime pay is now deductible up to $12,500 for singles or $25,000 for married couples through 2028.
• Car Loan Interest Deduction: Through 2028, you can deduct up to $10,000 in interest on loans for new American-made vehicles.
• Estate Planning Benefits: The estate tax exemption permanently increases to $15 million per person (adjusted for inflation)

What You Should Do Now:

We recommend speaking with your tax advisor about how these changes may apply to you or your business, and how you may want to consider changing your business structure with these updates. Many of these benefits are retroactive to 2025, so it could be beneficial to discuss adjusting your quarterly tax payments or withholdings. And, of course, I suggest that you speak with one of our bankers about your future needs and financial health. M C Bank’s vision is to be more than a bank, a place that helps you grow. So, we are here to help you make the most of these new opportunities. Whether you need financing for new equipment, want to expand your business, or have questions about managing cash flow, our team is ready to support you. If you have questions or want to learn more, stop by any of our banking centers or give us a call.

Warm regards,
Christopher P. LeBato
President & CEO
M C Bank

This letter is for informational purposes only and should not be considered tax advice. Please consult with your tax professional about your specific situation.