This article was originally published on: Year-End Tax Planning 2025
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How New Federal Rules Could Save You Thousands
As we approach the final weeks of 2025, American taxpayers face a unique window of opportunity. The sweeping One Big Beautiful Bill Act (OBBBA), signed into law this past July, represents the most comprehensive federal tax reform since the 2017 Tax Cuts and Jobs Act. For savvy individuals, families, and business owners, understanding these changes isn’t just important—it’s potentially worth tens of thousands in tax savings.
The Game-Changing Tax Reforms You Need to Know
Individual Tax Rates: Permanence Brings Planning Power
The current individual income tax brackets, ranging from 10% to 37%, are now permanent fixtures of the tax code. This stability means high earners with incomes above $626,350 (single filers) or $751,600 (married filing jointly) can plan with confidence around the 37% top rate.
- Why this matters: Permanent rates eliminate the uncertainty that has plagued tax planning for years, allowing for more long-term strategies.
Standard Deduction Gets a Major Boost
For 2025, the standard deduction jumps to $15,000 for single filers and $30,000 for joint filers—with annual inflation adjustments built in. This increase significantly raises the bar for itemizing deductions, fundamentally changing charitable and other deduction strategies.
SALT Cap Relief: A Four-Year Window
Perhaps most impactfully for high-tax state residents, the state and local tax (SALT) deduction cap increases from $10,000 to $40,000 for 2025, though it phases out for higher earners and reverts to $10,000 in 2030.
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- Action required: This temporary expansion creates a narrow window for strategic state and local tax planning. Consider accelerating property tax payments and state estimated taxes into 2025. Also, assets held in non-grantor trusts get their own $40,000 deduction.
Wealth Transfer Planning: The $15 Million Opportunity
Estate and Gift Tax Exemptions Reach New Heights
Beginning in 2026, the unified lifetime gift, estate, and generation-skipping transfer exemption rises to $15 million per person ($30 million per couple). Unlike previous temporary increases, this exemption is now permanent and indexed for inflation.
