“ One of the major planning opportunities is going to be to manage clients’ brackets, because a lot of the new incentives are based on, and then phased out on, different levels of income. So if you do a Roth conversion and that eliminates some deductions, then your Roth conversion just got more expensive,” says Matt Saneholtz, president and senior wealth advisor at Tobias Financial Advisors in Plantation, Fla.

Deductions Effective Now

The limit on the itemized deduction for state and local taxes has been upped to $ 40,000 for 2025, with 1 % annual increases through 2029, after which it returns to $ 10,000, the cap under the previous law. In the meantime, more clients will be able to benefit from itemizing deductions, Saneholtz says.

But the new limit begins shrinking for single and joint itemizers with over $ 500,000 of modified adjusted gross income and for non-grantor trusts with taxable income above that amount. Taxpayers with incomes above $ 600,000 can deduct only $ 10,000 of state and local taxes.

Nevertheless, wealthy clients can benefit from the rule change, says Steve Oshins, an estate planning attorney at Oshins & Associates in Las Vegas. Clients can create non-grantor trusts and fund them with income-producing assets or interests in a profitable business; each trust the client establishes can deduct up to the maximum

Clients can take this deduction whether they itemize or not, although it’ s reduced when income exceeds $ 75,000 for single taxpayers and $ 150,000 for joint filers.

in state and local taxes, he says. Because this deduction’ s higher limit sunsets at the end of 2029( unless extended by a future Congress), Oshins recommends implementing this strategy this year to maximize clients’ benefit.

Another change is a new $ 6,000 senior deduction for taxpayers age 65 and over, effective from 2025 through 2028. Clients can take this deduction whether they itemize or not, although it’ s reduced when income exceeds $ 75,000 for single taxpayers and $ 150,000 for joint filers.

A single taxpayer who qualifies for the full senior deduction and doesn’ t itemize could deduct $ 23,750 this year: which includes the $ 15,750 standard deduction for 2025 under the new law, plus a $ 2,000 additional standard deduction and a $ 6,000 senior deduction. A non-itemizing married couple with both spouses 65 or older could deduct $ 46,700, consisting of $ 31,500 in a regular standard deduction for joint filers, a $ 3,200 additional standard deduction($ 1,600 per spouse) and a $ 12,000 senior deduction($ 6,000 per spouse). Married individuals must file jointly to claim the senior deduction. Also new for this year through 2028 is a deduction for up to $ 10,000 of interest on auto loans. Both itemizers and non-itemizers can take this, as long as the loan was originated after December 31, 2024, and is not owed to a related party. In addition, the vehicle must be new, with final assembly in the U. S., and for personal use. The deduction is reduced for singles whose income exceeds $ 100,000 or for joint filers whose income is greater than $ 200,000.

Lower Estimated Tax Payments John Scherer, a principal and founder of Trinity Financial Planning in Middleton, Wis., says advisors should help clients turn new deductions into lower estimated tax payments for the remainder of this year,“ especially older folks in high-tax states.”

“ Doing a tax projection for clients, or urging them to have their tax person do one, could add real value in the second half of 2025,” he says.

Businesses may be able to pay less estimated tax, too. One bounteous provision of the new law is a permanent 100 % bonus depreciation that lets businesses write off the full cost of equipment and other qualified property placed in service on or after

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SEPTEMBER 2025 | FINANCIAL ADVISOR MAGAZINE | 9