PRC Gold Excel: Released Aug 1. PRC Gold 2025 subscribers can download the update.
Pralana Online: Released July 22.
- A summary of the OBBBA provisions is available at: Build > Scenario Assumptions > Tax Assumptions > OBBBA Summary.
- For the next month or so, you may disable/enable OBBBA at: Build > Scenario Assumptions > Tax Assumptions > Federal Tax Law Settings.
- The Sensitivity Analysis has a toggle to enable/disable OBBBA so you can see the impact on you scenario.
@cstone We'll also make the end of July the goal for implementing these changes in PRC2025 Gold. Older versions of Pralana Gold will not be updated.
Stuart
@smatthews51 Can you please point out where this change was implemented in PRC2025 Gold?
@adalziel The OBBB changes were included in v2.1 which you can get by logging in, going to the members page and requesting a free PRC2025 Update.
Stuart
Update 7/18: For Pralana Online subscribers, a summary of the changes is available at: Build > Scenario Assumptions > Tax Assumptions > OBBBA Summary and at More > Resources > OBBBA Summary
Regarding the phaseout of the $6k deduction, from section 70103 of the law:
``(I) In general.--In the case of any taxpayer for any taxable year, the $6,000 amount in clause (i) shall be reduced (but not below zero) by 6 percent of so much of the taxpayer's modified adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return). ``(II) Modified adjusted gross income.--For purposes of this clause, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.
So it phases out linearly as you surmised.
Looking forward to the updates, like lots of folks, we will need to see how much difference this makes to the plans.
Regarding the senior standard deduction add-on, I invite comment on these assumptions:
- during OBBBA, due to the phaseout AGI, it is possible for seniors to get $0 add-on
- the OBBBA senior add-on amount and the AGI phaseout limits are NOT inflation adjusted
- after OBBBA expires, the bonus will revert to the TCJA senior bonus (which IS inflation adjusted)
- states that base their taxes, in part, on the Federal standard deduction will use the OBBBA Federal standard deduction when applicable
I have created a Metric MRI to show the calculations the standard deduction and will likely replace the 'bonus' term with 'add-on'.
@cstone Can you elaborate on the "previous $2K indexed for inflation...... , not revert to $2K if not extended" under the bullet for Senior bonus above?
I'm not familiar with any previous senior bonus, other than the additional standard deduction for those aged 65+ ($2,000 for single filers, and $1,600 each for MFJ -- for tax year 2025 old law and OBBB).
@oldguy Yes, you are correct, I misspoke. For 2025 under TCJA the senior std dedn add-on is indeed $1,600 for MFJ (per person over 65) and $2,000 for singles. In 2029, if OBBBA is not renewed, I suppose we are to assume that the senior add-on will revert to the TCJA values, inflated from 2025 to 2029.
I will edit my post to clarify this point.
Thanks for sharing that, Rick.
"we will need to see how much difference this makes to the plans."
I will try to implement these with an OBBB toggle setting so that users can see the before/after OBBB plan results.
Also, we will likely need, as with TCJA, the option for users to change the planned expiration of OBBB from 2029 to some other year. Hopefully one expiration year will suffice as it is possible selected elements could end and others be extended.
Regarding the $1,000/$2,000 charitable deduction for non-itemizers, the bill indicates that although this deduction will be permanent, it is not effective until 2026.
SEC. 70424. PERMANENT AND EXPANDED REINSTATEMENT OF PARTIAL DEDUCTION FOR CHARITABLE CONTRIBUTIONS OF INDIVIDUALS WHO DO NOT ELECT TO ITEMIZE. (a) In General.--Section 170(p) is amended-- (1) by striking ``$300 ($600'' and inserting ``$1,000 ($2,000'', and (2) by striking ``beginning in 2021''. (b) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2025.
Mr. Stone and Mr. Matthews,
I just wanted to express publicly my appreciation to both of you for the gracious, conscientious, and expedited way you handle all inquiries and issues posted to this forum. I noticed an emergency fix released earlier this evening. Problem reported, problem solved, same day - on a Saturday night of a holiday weekend no less. The diligence with which you guys manage Pralana could be a business school case study in integrity and candidness, taking ownership no matter the difficulty or inconvenience, and unfailingly delivering service to your customers in an expedited and respectful manner. It truly is amazing what you two - just two of you! - have accomplished with delivering from scratch this incredibly sophisticated and continually evolving tool. I am confident I am but one of hundreds (thousands?) out here so greatly appreciative of your dedication and tireless hard work. Thank you!
Now get cracking on that iterative same-year tax algorithm (OK OK, after all this OBBB stuff)... 😉
