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 2025:
- Additional $6,000 per person standard deduction if you are over age 65, starting to phase out at $150,000 of income if you are filing married filing joint, and $75,000 of income for all other filing statuses.
- Increases the deduction for state income and real estate taxes from $10,000 to $40,000 for the next few years. This starts to phase out at income above $500,000 for most filing statuses. (The $40K limit is the same for all filing statuses but married filing separately).
Starting in 2026, mortgage insurance premiums on home purchases will now be deductible as an itemized deduction.
We anticipate a lot of changes in tax forms in the coming months. The IRS announced they would not change the 2025 form W2, but they did release a draft of the 2026 form W2, complete with 1 new box (14b) for the Treasury tipped occupation code, and new codes for box 12 to identify qualified tips, qualified overtime and for employers to report their contributions to the new Trump accounts on behalf of employees.
The IRS encourages taxpayers to setup their own online accounts, where you can access tax records and make and view payments.
In health news, in a new medical study on adults 65+, those that received a flu vaccine had a significantly lower risk of developing Alzheimer’s over the next 4 years as compared to the unvaccinated group. This study did not prove causation, but association, and more study is needed.
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.
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