Former President Donald Trump recently attended a rally in Butler, Pennsylvania, where a July assassination attempt against him took place. The event drew attention as Trump continues his campaign as the Republican presidential nominee for the upcoming election.
The Tax Cuts and Jobs Act (TCJA) provisions are currently uncertain, with Congress in a state of flux. Financial advisors are now starting tax planning for clients who may be affected. One major focus is estate planning, as the TCJA currently offers a higher estate and gift tax exemption. This allows tax-free transfers from wealthy individuals to their heirs, with a lifetime exemption of $13.61 million for individuals or $27.22 million for married couples. However, this limit is set to decrease after 2025 if Congress does not extend the provision.
Financial advisors are also considering strategies to accelerate income into lower tax brackets before potential tax hikes in the future. This could involve making Roth individual retirement account conversions or recognizing business income sooner. Pass-through businesses may want to leverage the 20% qualified business income deduction, which may also expire after 2025.
Additionally, filers may need to reconsider their deductions, as the standard deduction may be cut in half after 2025. This could lead to more individuals itemizing deductions, such as charitable gifts or state and local taxes. Financial experts suggest deferring deductions such as charitable donations until after 2025 to maximize tax benefits.
Overall, financial advisors are working with clients to navigate the uncertain tax landscape and develop strategies to optimize their financial situations in light of potential changes in tax laws.