How the Big Beautiful Bill Benefits Your Residential Pole Barn Project

Whether you have been thinking of building a 30' x 40' pole barn kit, a 2-story barndominium, or a 40' x 60' hobby shop, there has never been a better time than now to build.

While you might argue that the tariffs have impacted steel and lumber prices, the recent passage of the Big Beautiful Bill brings four  ways to help you afford a new pole building.

The One Big Beautiful Bill Act (BBB) was implemented to make some of the policies from the 2017 Tax Cuts and Jobs Act permanent. In addition, this bill brings forth new initiatives, such as "no tax on overtime" and changes to the State and Local Tax standard deduction.

We have covered how this is beneficial for farmers and the construction industry, so now we will break down the ways that the Big Beautiful Bill impacts residential customers.

1. Personal Deductions

When tax season arrives, you may be pleasantly surprised by the additional deductions you qualify for. These deductions help lower your taxable income, resulting in lower federal taxes or a nice tax refund!

First, the bill temporarily increased the cap on itemized deductions for State and Local Taxes (SALT) to $40,000 for 2025. It increased the cap by 1 percent from that level through 2029, subject to a phaseout for taxpayers with incomes above $500,000, then reduced the cap to a flat $10,000 thereafter. 

Additionally, it made the standard deduction permanent, increasing to $31,500 for joint filers, $23,625 for head of household filers, and $15,750 for all other filers, with inflation adjustments thereafter.

Do you give charitable donations?  A 0.5% floor now applies to itemized deductions for charitable contributions. Additionally, there's a new permanent above-the-line deduction: up to $1,000 for individuals and $2,000 for joint filers — even if you don't itemize your deductions.

Over the age of 65? You now may qualify for an additional deduction of $6,000 (or $12,000 per married couple) from now until 2028. This is a new temporary deduction in addition to the current standard deduction for seniors.

Have kids? This law increases the maximum Child Tax Credit amount to $2,200 in 2025 and adjusts the credit's value for inflation moving forward, while tightening eligibility requirements. Other family-related changes include a modest increase to the child and dependent care tax credit.

Do you receive tips as part of your job?  Starting in 2025, employees and self-employed workerscan deduct up to $25,000 in tips received in certain occupations where tips are typically accepted, as long as the tips are reported. The deduction is available to all taxpayers (whether or not they itemize), but it phases out for incomes over $150,000 ($300,000 for joint filers). 

Do you work overtime? Workers can deduct the overtime premium pay (the extra half from "time-and-a-half") from their income, up to $12,500 per year ($25,000 for joint filers). It phases out for incomes over $150,000 (or $300,000 joint).

Purchasing a new vehicle? You can deduct up to $10,000 per year in interest on loans used to buy a new, personal-use vehicle (not leased or used). The car must be under 14,000 lbs and final assembled in the U.S.

All of these personal deductions mean more money back into your pocket, so you can invest in what matters most to you.

2. Second Home Deduction  

The homebuying process can be daunting. From moving boxes to all of the paperwork, the last thing you might be thinking of is how the interest from the loan will affect your taxes. 

Previously, if you sold your home and bought a new home in the same year, you could only deduct the mortgage interest from one of the primary residences, even if you only lived in one house at a time. However, with the new BBB, you can now write off interest on both homes. 

If you are looking to live in your current home while building your dream barndominium, this change also allows you to write off the interest on your construction loan, too!

Additionally, the current mortgage interest deduction is made permanent, and insurance premiums are now eligible for deduction.

3. Home Energy Credits

Green energy has been a buzzword for the past decade. While there have been significant strides in creating renewable energy through wind and solar, if you plan to add these to your homestead or make energy-efficient home improvements that qualify for tax incentives, it's best to act now before the tax credits expire.

The BBB did not extend the current home energy credits. It also introduced additional restrictions for tax credits, requiring that materials used to make products must come from countries the United States has approved; otherwise, your project may not qualify for the credit.

The following energy tax credit changes include:

• 30% credit for solar panels, wind, geothermal, and battery storage systems expires after December 31, 2025
• 30 % for insulation, windows, doors, and HVAC ends after December 31, 2025.  
• New Energy Efficient Home Credit (Section 45L). Credit for builders of energy-efficient homes terminated for properties acquired after June 30, 2026.  
• Investment Tax Credit for Solar & Wind (Section 48E). 30% ITC for commercial wind and solar ends after December 31, 2027, unless construction begins by July 4, 2026 (then must be placed in service by the end of 2027).  
• New and used EV credits expire after September 30, 2025, and the EV charger credit expires after June 30, 2026.  
• The 5-year accelerated cost recovery period for energy properties is removed for those beginning construction after December 31, 2024. As a result, only 100% bonus depreciation remains for properties acquired after January 19, 2025, with no energy property bonus depreciation available after 2024.

4. Estate Tax

If you are blessed with an inheritance, the last thing you want is to pay taxes on it. With the Big Beautiful Bill, the estate and lifetime gift tax exemption was permanently increased to an inflation-indexed $15 million for single filers and $30 million for joint filers, effective beginning in 2026.

This means that if you inherit a large sum of cash, you can have more of the money in your pocket to invest in a new luxury barndominium or buy a farm!

What Deduction Are You Most Excited About?

While the Big Beautiful Bill may have come with some controversy around the cuts to energy tax credits and other programs, some additional deductions and programs incentivise individuals.

If you are interested in building a pole barn, the extra money from your tax refund, combined with the ability to write off your construction loan interest, could be the extra push you need to decide to build.

If you qualify for the deductions outlined in this blog, you can expect a better federal income tax return, resulting in more money in your piggy bank. This will give you more money to invest in what you want to buy. Additionally, many of these programs have been made permanent or adjusted for inflation, allowing you to become accustomed to these tax changes.

Disclaimer: Please note that this blog is to inform. Please consult with your tax advisor to determine your eligibility.

Do you have more questions that aren’t covered in this article? If you need help designing and planning, please contact FBi Buildings at 800.552.2981 or click here to email us. If you’re ready for a price, click here to request a quote, and a member of our Customer Engagement Team will help you determine the next steps.