My name is Evan Vladem, and I’m a partner and financial advisor at Associated Investor Services. I get it... talking about money can be intimidating... So, we created a judgment-free space where there are no "dumb" questions or embarrassing situations.
Everything and anything is welcome, and we'll provide our best answers and/or guidance. Feel free to submit questions or letters directly to me via email HERE. You have my word, your identity will remain anonymous to our readers.
Dear Evan,
Every time I turn on the news lately, I’m seeing coverage of the new tax bill President Trump signed into law. With so many moving parts, I’m wondering whether there are steps I should be taking to adjust my tax planning or how this might impact me. How do I know if I’m making the most of the opportunities—and not missing anything important?
-Proactive Investor
Dear Proactive Investor,
You’re certainly not alone in wondering about this. Over the past couple of weeks, a lot of our client conversations included questions about what this new tax law really means in practice, especially for individuals and families with more complex financial situations.
At its core, the legislation makes permanent many of the provisions from the 2017 tax cuts, including the existing income tax rates, and provides more certainty around estate planning. But it also introduces new deductions, phaseouts, and deadlines that are important to understand as you look ahead.
One area that may stand out for you is the expanded state and local tax deduction (SALT). Beginning in 2025, the cap will rise from $10,000 to $40,000 and will increase slightly each year through 2029. However, for households with income above $500,000, this higher deduction starts to phase down and eventually reverts to $10,000 in 2030. If you live in a high-tax state, this could be a meaningful benefit, especially if you plan carefully around your income levels. For many clients, that may involve reviewing the timing of income, charitable contributions, or Roth conversions to help capture the full deduction while it’s available.
The law also brings welcome clarity around the estate and gift tax exemption. Instead of falling back to about $7 million in 2026 as previously planned, the exemption will now be permanently set at $15 million per person or $30 million per couple, with adjustments for inflation. For those thinking about long-term legacy strategies, this change may reduce some of the urgency around making large gifts in the immediate term. Still, it’s wise to remember that no exemption is ever truly permanent, and future administrations could revisit this level. Having a thoughtful estate plan in place remains essential.
Charitable giving rules are also evolving. Beginning in 2026, taxpayers who do not itemize deductions will be able to claim a modest deduction—up to $1,000 if filing single or $2,000 if married—for charitable donations. At the same time, for those who do itemize, the law adds a new limitation that reduces the deductible amount by 0.5% of your modified adjusted gross income. For example, if your AGI is $300,000, the first $1,500 of your donations will not be deductible.
The bill also creates a federal child investment account. Beginning in 2025, every child born through 2028 with a valid Social Security number will receive a $1,000 government seed contribution, automatically invested in a stock index fund. Families can contribute up to $5,000 per year per child, deductible from taxable income within income limits. While these accounts offer broader uses—including funding a first home purchase or recovery from a disaster—withdrawals are generally taxable, unlike 529 plans, where qualified education expenses are exempt from federal tax. In many cases, families may find 529 plans or Roth IRAs offer clearer tax advantages for education-focused saving.
The bill permanently sets the corporate tax rate at 21%. In contrast, income from flow-through businesses—such as S corporations, partnerships, or LLCs—can be taxed as high as 32% to 40%. Some business owners may be able to shift income from an S corporation or an LLC to a C corporation, and have a significant opportunity to reinvest more profits into their business.
The new legislation also introduces several targeted deductions that will apply only from 2025 through 2028, including deductions for certain types of overtime income, tips, car loan interest on U.S.-made vehicles, and an extra deduction for individuals over 65 with more moderate incomes. While many of these provisions phase out at higher income levels and may not be as significant for every household, they are worth reviewing to see whether any apply to your situation.
It is worth noting that the law leaves retirement accounts and investment taxes unchanged. Contribution limits and rules for IRAs, Roth IRAs, and 401(k)s remain the same, and the top tax rate on long-term capital gains and qualified dividends is still 20% plus the 3.8% surtax.
The bottom line is that while this legislation provides a measure of stability and clarity, it also creates new opportunities and deadlines that should be integrated into your tax and estate planning. Whether you stand to benefit most from the expanded SALT deduction, the higher estate exemption, the new child investment account, the lower corporate tax rate, or changes to charitable giving will depend on your unique circumstances, where you live, and what your long-term goals look like.
If your situation has changed recently, or if you’re simply unsure how these changes affect you, this is an ideal time to revisit your planning. We are here to help you sort through these details and make sure you are making the most of the options available.
And remember, while tax laws can shift over time, a thoughtful, regularly reviewed plan can help you move forward with confidence and peace of mind.
Cheers,
-Evan Vladem
P.S. Very special thanks to our intern Luke McCarthy for providing background, research and color in our response.