Recent federal legislation both preserved rules that were about to expire and added new temporary provisions affecting individual taxpayers. At the 2025 Investment Outlook Seminar, Dave Sandstrom offered an overview of the highlights of those tax changes.
Just in time for the tax preparation season, Dave shared the tax law developments to help clients consider possible consequences in their financial plans. He stressed that investors should work with a trusted tax advisor to address their individual circumstances.
“Please consult a tax professional because there were significant changes,” Dave said. “Don’t try to do this on your own. One mistake will certainly cover the cost of having a professional prepare your return.”
Dave explained items made permanent from the 2017 tax act, including:
- Seven individual income tax rates, ranging from 10% to 37%, with the taxable income brackets for each rate adjusting annually for inflation.
- Higher standard deduction amounts – and indexed to inflation.
- Higher exclusion from the estate and gift tax – also indexed to inflation, beginning in 2026.
Dave also covered new temporary features, such as:
- An extra senior deduction of $6,000 for individuals 65 or older ($12,000 per couple), which phases out at higher incomes.
- For itemized tax filers, a higher maximum deduction ($40,000) for state and local taxes.
- For itemizers, with income restrictions, a deduction for interest paid on auto loans for certain U.S.-made vehicles.
To view Daves’s presentation, please click here, or click the image above.
(Money Talk Video edited by Jason Scuglik)