Big Tax Changes Every Real Estate Pro Needs to Know (From the Real Estate Show with Pat Lopez)
In a recent episode of The Real Estate Show with Pat Lopez, Pat sat down with CPA Brian Pigula to break down the “big, beautiful bill” and what it actually means for everyday taxpayers—especially those in real estate, lending, and commission-based roles.
If you’re a realtor, loan officer, investor, or 1099 earner, this episode was packed with gold. Let’s break it all down in plain English 👇
The Big Picture: Did Tax Rates Change?
Short answer: not really.
Tax brackets stayed mostly the same, with minor annual adjustments tied to inflation. The key reminder Brian emphasized is one most people forget:
Only the income inside each bracket is taxed at that rate—not your entire income.
So the real excitement this year isn’t tax rates… it’s new deductions.
1️⃣ No Tax on Tips & Overtime (Well… Almost)
Tip Deduction (Up to $25,000)
This one got the headlines—and for good reason.
It’s a deduction, not an exclusion
Applies to reported tips (W-2 Box 7 or 1099 income)
Covers most service industries (food, hospitality, delivery, etc.)
Payroll taxes still apply (Social Security & Medicare)
Income limits:
Single filers: phases out around $75,000
Married filing jointly: phases out around $150,000
💡 Real estate angle:
This could help tipped workers show more income (useful for mortgage qualification) without increasing federal income tax—huge win for borrowers.
Overtime Deduction
Only the “time-and-a-half” portion counts as deductible.
Example:
Normal pay = $200
Overtime pay = $300
$100 qualifies for the deduction
Employers don’t have to report this separately yet (it’ll be mandatory later), so keeping records is critical.
2️⃣ Senior Deduction = Massive Planning Opportunity
This one is flying under the radar—and it shouldn’t.
If you’re 65 or older, you may qualify for a new $6,000 deduction per person, on top of the standard deduction.
Married couple example:
Standard deduction: ~$32,000
Senior add-on: ~$3,000
New senior deduction: $12,000
👉 Total: ~$47,000 tax-free income
💡 Why this matters:
This opens the door to:
Strategic 401(k) withdrawals
Harvesting capital gains
Reducing future Required Minimum Distributions
⚠️ Just be mindful—taking too much income can cause more of your Social Security to become taxable.
3️⃣ Bonus Depreciation Is Back (100%)
Bonus depreciation jumped back to 100% for qualified property.
What qualifies?
Equipment
Certain interior improvements
Assets with a useful life under 20 years
What doesn’t qualify?
The building structure itself
Key rule that hasn’t changed:
👉 The asset must be placed in service (not just ordered).
💡 Real estate impact:
Instead of paying taxes, investors can reinvest cash into:
Energy-efficient upgrades
Renovations
Productivity improvements
This is a powerful lever for both tax savings and long-term growth.
Bonus: 1099 Earners—Don’t Get Burned
Brian’s advice was crystal clear:
Treat yourself like a W-2 employee.
Best practices:
Set aside 25–30% of every commission
Make weekly or monthly IRS payments
Don’t wait until April
You can:
Pay directly through an IRS account
Make more frequent payments than quarterly
Even aim for a refund instead of a surprise bill
This reduces penalties, stress, and sleepless nights.
