As of July 4th, 2025 we now have a new tax bill to sift through.  The One Big Beautiful Bill has introduced changes to a wide range of programs including government assistance, immigration and border policy, but it also has some key items that we feel may affect our clients overall tax picture.  Some of these changes took effect immediately and will affect your 2025 tax return while others go into effect in the coming years. 

 

The bill was roughly 900 pages, so the purpose of this article is not to attempt to explain or summarize the entire bill, or even comprehensively explain key provisions, but simply to highlight some of the items in the bill that could affect wealth management and general planning.  The intent is to give some suggestions that you may want to discuss further with your CPA or tax advisor to see how they may apply to you and if you can realize some benefit.

 

Lower Income tax rates extended - The individual income tax

brackets introduced by the TCJA have now been made permanent, with the top top marginal rate at 37% (instead of returning to 39.6%) and lower rates across most tax brackets. The bracket thresholds have also been adjusted upward for inflation, which may help reduce your taxable income.

Capital Gains Brackets Adjusted for Inflation - Capital gains tax brackets have been adjusted for inflation, allowing more investors to stay in the 0% or 15% tax range. For 2025, individuals can have up to $48,350 in taxable income, and married couples filing jointly can have up to $96,700, and still qualify for the 0% rate.

New Car Loan interest deductions - Starting in 2025, taxpayers may deduct up to $10,000 in interest on new auto loans.  The benefit phases out for individuals earning over $100,000 ($200,000 for joint filers)

Temporary “Senior Bonus” Deduction Introduced - Americans age 65 and older may qualify for a temporary $6,000 “bonus” tax deduction starting in 2025. The full amount is available to individuals with incomes of up to $75,000 ($150,000 for joint filers) and phases out for those with higher incomes.

Expanded Child Tax Credit  - The Child Tax Credit increases to a maximum of $2,200 per child with a refundable amount of $1,700 in 2025, indexed for inflation in subsequent years. The credit phases out for individuals earning over $200,000 and married couples filing jointly earning over $400,000.

State and Local Tax Deduction Cap Increased - Beginning in 2025, the cap on SALT deductions will rise from $10,000 to$40,000, offering potential relief to households in higher-tax states.  The deduction begins to phase out for taxpayers with incomes above $500,000.

Alternative Minimum Tax Relief Made Permanent - The new law permanently extends the

higher Alternative Minimum Tax (AMT) exemption levels set by the 2017 tax cuts, helping more households avoid the Alternative Minimum Tax.

The lifetime exclusion is now $15 million — permanently - Before this law was passed, the estate and gift tax exclusion was set to drop to roughly $7.2 million in 2026. That meant individuals with more than $7 million in assets (or $14 million for couples) were likely to face federal estate taxes.  The new exclusion is set at $15 million, which will lower the number of individuals and couples subject to estate tax.

This is a short list from a big bill, (no pun intended) but even this short summary provides potential opportunities for many of our clients.  Please talk to your tax advisor about how the bill will impact your personal situation and we are always happy to be part of that conversation if it would be helpful.