How to Prepare for the Coming Tax Doomsday, December 31, 2025
As the world continues to evolve, so does the financial landscape, presenting new opportunities…and challenges. In a recent online event, Dave Phillips of Estate Planning Specialists, LLC, took the virtual stage to discuss the pressing issue of preparing for coming tax changes.
Phillips highlighted the significance of understanding the current tax laws and impending alterations. He emphasized that if no further legislation is passed, significant changes are set to take effect by December 31st, 2025.
Understanding the Coming Tax Law Changes
The key change in this presentation is the expiration of the Tax Cuts and Jobs Act (TCJA) provisions. This act, passed in 2017, made significant changes to the tax code, including:
- Lowering individual income tax brackets
- Reducing deductions
- Increasing the child tax credit
- Lowering corporate tax rates
Phillips’ presentation assumes that if no new legislation is passed by December 31, 2025, these changes from the TCJA will expire. This means the tax code would revert back to what it was before the TCJA, or potentially a new system altogether would be implemented by Congress.
The exact changes are uncertain because they depend on future legislation. However, Phillips suggests these changes could be significant and could potentially raise your taxes.
Strategies to Reduce Your Tax Bill Under Current Law
The presentation explores techniques you can leverage under the current tax code to potentially lower your taxes. These strategies include:
- Roth Conversions: Converting traditional IRAs to Roth IRAs allows for tax-free withdrawals in retirement. However, there may be tax implications when converting existing funds.
- Gift Tax Exclusions: The tax code allows you to give a specific amount of money to individuals annually without incurring gift taxes. Leveraging these exclusions can be a tax-saving strategy.
For a deeper dive into Dave Phillips’ insights and strategies, watch the full presentation. He explores these concepts in greater detail and offers additional tactics for potentially minimizing your tax burden in light of the upcoming tax law changes.
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Originally published March 11, 2024