The One, Big, Beautiful Bill (OBBB) recently introduced several important tax changes affecting individual taxpayers, estates, employers, and families. If you are a professional in Los Angeles — whether a doctor, dentist, freelancer, creator, or high-net-worth individual — understanding these changes can help you plan effectively and reduce your tax liability.

Here’s a detailed breakdown of the key changes, including examples relevant to professionals and business owners.

1. Standard Deduction Increases

Example:

• If you are a freelance YouTuber in Los Angeles filing as single, your standard deduction rises from $15,500 in 2024 to $15,750 in 2025, and then to $16,100 in 2026, reducing your taxable income and overall tax liability.
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• A dentist running a solo practice who files married jointly can now deduct $31,500 in 2025 and $32,200 in 2026, lowering their taxable income.

2. Marginal Tax Rates

For 2026, the OBBB keeps the top federal tax rate at 37%:

Example:

• A high-net-worth individual with an income of $520,000 in 2026 (married filing jointly) will have portions taxed at each bracket, with the top portion at 35%, not 37% yet.
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• A Shopify store owner earning $180,000 as a single filer will primarily be in the 32% bracket, benefiting from the standard deduction increase.

3. Alternative Minimum Tax (AMT) Exemption

For 2026:

• Single taxpayers: $90,100, phaseout begins at $500,000
• Married filing jointly: $140,200, phaseout begins at $1,000,000

Example:

• If a Los Angeles content creator earns $550,000 as a single filer, the AMT exemption begins to phase out, potentially increasing their taxable AMT liability.

4. Estate Tax Changes

• Basic exclusion for decedents dying in 2026: $15,000,000, up from $13,990,000 in 2025

Example:

• A high-net-worth client planning to pass assets to their heirs can now exclude up to $15 million from federal estate tax, an increase from prior years.

5. Adoption Tax Credit

For 2026:

• Maximum credit: $17,670, up from $17,280 in 2025
• Refundable portion: $5,120

Example:

• A freelance TikToker in LA who adopts a child in 2026 can claim a $17,670 adoption credit, with up to $5,120 refundable if they owe little or no tax.

6. Employer-Provided Childcare Tax Credit

For 2026:

• Maximum credit increases from $150,000 to $500,000, or $600,000 for eligible small businesses

Example:

• A CPA for Shopify Store clients who provides childcare for employees can now claim a credit of up to $500,000, helping offset payroll costs.
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• A medical practice or dental office providing onsite childcare for staff could benefit from the enhanced credit.

7. Planning Tips for Los Angeles Professionals

1. Review your filing status and deductions
   Take advantage of increased standard deductions and plan income to optimize tax brackets.
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2. Consider retirement and charitable planning
   With higher deductions and credits, year-end charitable contributions or retirement contributions can help reduce taxable income.
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3. Evaluate employer benefits
   If you own a business, explore how the enhanced childcare credit can benefit your practice or employees.
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4. Plan for estates and adoption credits
   High-net-worth individuals should update estate plans, and families adopting children can maximize the credit.

Velin & Associates, Inc. specializes in helping Los Angeles professionals navigate federal and California tax changes, including new rules under the OBBB. We provide strategic guidance for:

• YouTubers, TikTokers, and content creators
• Shopify, Amazon, and e-commerce sellers
• Medical and dental professionals
• High-net-worth individuals

We ensure your income, deductions, and credits are maximized under the latest rules.

For more information about our services, please visit our website.

Velin & Associates, Inc

8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org

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