ln December of 2017, the sun rose on the Tax Cuts and Jobs Act passed by Congress and signed by President Trump. There were numerous changes to tax law which affected income taxes, gift taxes, estate taxes, retirement plans, etc. But on December 31, 2025, the sun is setting on many of the provisions and most things go back to the way they were before 2018.

Are you prepared? Have you even thought about the implications? What can/should you be doing now? Why bother, this is two years away? The elections in 2024 will make a difference to what happens, but are you willing to take a chance? Frankly, we have never been a fan of making radical financial decisions based on tax legislation which is permanent until Congress changes it again. What we want you to do is to start thinking about it and yes, “Be Prepared” with a plan.

The provision which has gotten the most attention is the estate tax and its lifetime gift and estate exemption. Prior to 2018, this exemption was $5 million per person – $10 million for a married couple. This amount in 2024 is $13.61 million per person – $27.22 million for a married couple. It increases once again in 2025 based on inflation.

BUT on January 1, 2026 the amount will be cut in half which is estimated to be about $7 million per person – $14 million for a married couple. With an estate tax of 40%, it can add another $5.5 million in estate taxes for those that die 1/1/26 vs. 12/31/25. Imagine an extremely ill parent in December of 2025 – will the heirs be pulling for dear old dad to die before New Years? These are societal issues affected by political tax issues.

So, what should be done? The first thing to do is to visit with your financial, tax and legal advisors. They have not talked to you about this issue? Shame on them. Unlike many firms which claim to be “financial planners”, at ProVise we actually do planning, not just investment management. And while you may not execute on anything at the moment, you need to consider alternatives and be ready to implement them when and if necessary. You don’t want to wait until the last minute when everyone else is scrambling to catch up.

While estate taxes are grabbing the headlines, they are far from the only thing that will change and many of these others will affect many more. The top income tax rate prior to the Act was 39.6%, but those lucky enough in the top rate found themselves with a top rate of 37% after the Act. In 2026, it goes back to 39.6%. In 2024, the standard deduction is $29,200 married and $14,600 single but reverts to about $12,800 and $6,400 respectively (indexed for inflation) in 2026. While we are talking about deductions, there will be a change for mortgage interest. Currently, one can only deduct mortgage interest paid on the first $750,000 and only for repairs/improvements for a home equity loan. These will revert to $1 million on a first mortgage and to $100,000 for a home equity loan.

On the investment side, capital gains will basically remain the same at a top rate of 20%. However, qualified dividends which have been taxed at capital gains since the Act, will revert to being taxed as ordinary income. The alternative minimum tax (AMT) will revert to the old threshold levels which will increase the taxes caught by this awful tax provision.

More changes are happening to both personal and corporate taxes, but room prevents talking about all of them here. What do you do now? As is often the case in financial planning, “it depends”. Every taxpayer is in a similar but unique situation, and it requires personalized advice based on age, income, assets, health, etc.

At ProVise, we offer a complimentary consultation to prospective clients in either our Clearwater or Tampa office, or by Zoom. Why not join our approximately 1,100 clients who enjoy proactive financial planning advice rather than reactive advice, or perhaps no advice at all?


The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and are subject to change.
Investment Advisory Services may be offered through ProVise Management Group, LLC.