While Jon and I recapped the tax and financial planning effects of the recently passed tax legislation on August 8, we wanted to reiterate a few of them each month. These rule changes take effect in 2026:
- The estate and gift tax limit is now $15 million per person
- Qualified distributions from 529 plans (college funding) now allow up to $20,000 per year to be used for K-12 expenses
- The dependent care FSA limit has increased from $5,000 to $7,500
- The threshold for 1099 reporting has increased from $600 to $2,000
- If you are an educator that uses your own money to pay for supplies, you can now deduct all of the unreimbursed expenses on Schedule A if you itemize your deductions.
According to FactSet, over 80% of companies in the S&P 500 beat their earnings estimates for Q2 2025. Since a key determinant of long-term stock prices is future expected earnings, this high percentage bodes well for the stock market as a whole. (When you buy a stock, you are buying a proportional share of their future earnings).
According to the Washington Post, Energy prices have spiked partially due to the proliferation of data centers (powering the growth of AI?). Interestingly, the cost of electricity in the state of Maine grew faster than all but CA and MA over the past 10 years. However, ME still boasts the 2nd cheapest electrical rates in New England (after Vermont).
Congratulations Evan!
Our own Evan Marquis obtained his CFP certification this past May. Congratulations, Evan!
Taxes and financial planning are complex, but you don’t have to navigate them alone. A financial advisor can help you stay informed about tax law changes, optimize your savings and investments, and avoid costly mistakes. If you need tailored guidance, our team is here to help. Talk to an advisor or call (603) 589-8010 to integrate tax planning into your comprehensive financial strategy.
Disclaimer: This is not to be considered investment, tax, or financial advice. Please review your personal situation with your tax and/or financial advisor. Milestone Financial Planning, LLC (Milestone) is a fee-only financial planning firm and registered investment advisor in Bedford, NH. Milestone works with clients on a long-term, ongoing basis. Our fees are based on the assets that we manage and may include an annual financial planning subscription fee. Clients receive financial planning, tax planning, retirement planning, and investment management services and have unlimited access to our advisors. We receive no commissions or referral fees. We put our client’s interests first. If you need assistance with your investments or financial planning, please reach out to one of our fee-only advisors. Advisory services are only offered to clients or prospective clients where Milestone and its representatives are properly licensed or exempt from licensure.
