As we move through 2025, it’s more important than ever to stay proactive with your tax planning. A number of key tax credits, deductions, and lower rates are scheduled to expire at the end of the year, and if Congress does not act, many taxpayers could face higher tax bills in 2026.
Here’s who should consider ongoing tax planning right now as uncertainty looms:
📈 Your Income Is Increasing
If you’re expecting a promotion, a new job, or any jump in income, a tax planning session is essential. The top marginal tax rate is currently 37%—but without Congressional action, that rate could rise in 2026. Planning now can help you take advantage of the current brackets while they last.
🧾 You Previously Itemized Deductions
Many taxpayers could return to itemizing in 2025 if the current standard deduction rules roll back. This is especially relevant if you have high state income taxes or significant real estate taxes. A strategy session can help you time your deductions and expenses wisely.
🏡 You Have a Large Estate
The federal estate tax exemption is historically high right now—$13.99 million for individuals, $27.98 million for couples in 2025—but it’s scheduled to drop to $5 million (adjusted for inflation) in 2026. Gifting assets or making other strategic moves this year can reduce your taxable estate and lock in today’s generous exemption levels.
📊 You Hold Investments
Now is the time to ensure your portfolio is tax-efficient. Tax-loss harvesting, revisiting your asset location strategy, and possibly accelerating capital gains to take advantage of lower rates in 2025 could all be smart moves. If your tax rate will rise in 2026, realizing gains this year might be a win.
🔎 Remember: the wash sale rule only applies to losses, not gains—so you can sell appreciated assets and buy them back immediately.
🏢 You Own a Small Business or Have Pass-Through Income
The Qualified Business Income (QBI) deduction could be going away. That’s a significant benefit for pass-through entities like sole proprietors, LLCs, and S corps. Planning now may involve reviewing your entity structure or adjusting income to minimize the impact of this deduction’s possible expiration.
🧩 The Bottom Line:
The tax landscape is poised for significant change. By working with a trusted advisor and starting your tax planning now, you’ll be better equipped to adapt—no matter what decisions are made in Washington.
Let’s get ahead of it
schedule your tax planning session with Gleason Tax Advisory today.
