GHAdvisor - Newsletter
News
The news of the administration passing the sweeping legislation last week has everyone asking what changes affect us as investors and taxpayers. One of the largest pieces of the bill is not a change at all, but rather an extension of existing tax cuts. The Tax Cuts and Jobs Act provisions (2017) were set to expire this year. These include individual tax rates, increased standard deductions, child credits, and gift exemptions.
There are a couple of changes within the provisions for 2025.
The standard deduction increases in 2025. The single filer deduction increases from $15,000 to $15,750, and the married filer deduction increases from $30,000 to $31,500.
For those who itemize deductions, the cap on the amount of state and local tax payments that can be deducted increases from $10,000 to $40,000 if your income is below $500,000.
There is a deduction for car loan interest on a new car purchase up to $10,000. This comes with some income testing and a stipulation that the car must have been assembled in the U.S.
Americans over age 65 still claim an extra deduction, but the bill adds an additional amount.
Currently, in addition to standard
$2,000 for a single filer
$3,200 for a couple
the bill adds an extra $6,000 for over-65 filers through 2028. This Senior Tax Deduction has income thresholds outlined below.
Full deduction: Single filers with AGI ≤ $75,000
Married couples with AGI ≤ $150,000
AGI is your Adjusted Gross Income on your tax return.
Partial deduction phases out above $75K/$150K
No deduction after AGI reaches $175K (single) or $250K (married)
One effect of this for some seniors will be a lower tax on Social Security income due to lower taxable income resulting from the additional deductions.
These changes detail tax implications. It remains to be seen what the economic impacts of the legislation will be. There is concern about the potential increase in the deficit, the strain on healthcare, and the impact on economic growth with this bill. The legislation is extensive, including hundreds of provisions that touch everything from individual rates to student loans to estate taxes. It attempts to pay for the tax breaks by cutting spending on social safety net programs like Medicaid and nutritional benefits, as well as green energy programs. Even with the spending cuts, it is expected to add just over 3 trillion to the national debt over the next 10 years. * Some forecasts do predict increased GDP and productivity, but it may not be enough to control the deficit or rising inflation.
As with every economic shift, global change, disaster, crisis, or policy change, we believe that planning and investing are long-term ventures. The road will have its ups and downs, but there are always opportunities in change. We continue to adjust and analyze each client’s portfolio, timeline, and needs to meet long-term financial goals.
* July 1, 2025, Penn Wharton Budget Model
How To Protect Yourself from Phishing Attacks **)
Your email spam filters might keep many phishing emails out of your inbox. But scammers are always trying to outsmart spam filters, so extra layers of protection can help. Here are four ways to protect yourself from phishing attacks.
Four Ways to Protect Yourself from Phishing
- Protect your computer by using security software.
Set the software to update automatically so it will deal with any new security threats.
- Protect your cell phone by setting the software to update automatically.
These updates could give you critical protection against security threats.
- Protect your accounts by using multi-factor authentication.
Some accounts offer extra security by requiring two or more credentials to log in to your account. This is called multi-factor authentication. The extra credentials you need to log in to your account fall into three categories:
something you know — like a passcode, a PIN, or the answer to a security question.
something you have — like a one-time verification passcode you get by text, email, or from an authenticator app, or a security key
something you are — like a scan of your fingerprint, your retina, or your face
Multi-factor authentication makes it harder for scammers to log in to your accounts if they do get your username and password.
Protect your data by backing it up.
Back up the data on your computer to an external hard drive or in the cloud. Back up the data on your phone, too.
Summer Reading – from Capital Group/American Funds: Capital Ideas TM
Live in the sunshine. Swim in the sea. Drink in the wild air.
Ralph Waldo Emerson
