The tax landscape is poised for major shifts in 2025. In this video, Jeff McClean, CEO of Solidarity Wealth, and Lynn Evans, Tax Advisor & Director of Family Office Services, break down what these changes mean for affluent individuals, entrepreneurs, and executives like you.
- What policies are likely to change under the new administration?
- How could tax rates, deductions, and exemptions shift in 2025?
- What proactive strategies should you be thinking about now?
In this candid conversation, Jeff and Lynn cover both the political landscape and the real financial impact. Their insights can help you think ahead and make informed decisions in this new tax environment.
Transcript
Introduction: Understanding the 2025 Tax Landscape
Hello, I am Jeff McClean, CEO of Solidarity Wealth. This is my colleague, Lynn Evans, our Director of Family Office Services. And we are here today to talk about taxes, everyone’s favorite topic.
But in all seriousness, going into 2025, we’ve got some big issues. We’ve got a new Trump presidency. We have Republicans in the House and the Senate. We have a tax cliff coming this year. So we wanted to share this time with you to talk about a 2025 tax outlook. What’s out there? What are the issues and what you need to think about?
Meet the Experts: Jeff McClean & Lynn Evans
Before we dive in, we thought it’d be wise to give you a little background about who Lynn and I are, since taxes are near and dear to our heart, both personally and professionally.
My background, Jeff McClean, is I am a tax and estate planning attorney by background. I practiced law in Texas for about eight years and worked with successful families all throughout the United States and other countries around taxes and the importance of them, and obviously how to minimize or pay a little bit less, whether that’s in income taxes or estate tax.
Lynn also went to law school, went to law school in New York, and has been in the tax world his whole career. He started out working for Goldman Sachs family office group, which is called ACO, and then moved into public accounting as a trust and estates and partnership tax expert.
How the Trump Administration May Influence Tax Policy
Lots going on. We have a Trump presidency. We have a narrow but Republican Congress, both in the House and in the Senate. What can we expect coming up this year?
Lynn: Well, Jeff, first and foremost, we’ve had just over two weeks of a Trump presidency, as you mentioned. And there are some things, some actions that he’s already taken. Actually, he’s taken a lot of actions, a few of which are directly related to tax policies.
First, he issued two executive orders, one freezing the hiring for all federal agencies, and the second one requiring a mandate that everyone returned to the office.
Why does this matter? Well, the IRS was roughly 40% remote. With this new mandate, many may choose to leave, leading to a shortage of staff. The hiring freeze means that the IRS can’t easily replace those employees without direct action by the Secretary of Treasury. This could lead to longer processing times for current tax returns, delays in amended tax returns, and unknown impacts on audits.
The 2025 Tax Cliff: What’s at Stake?
Jeff: We have a bit of a tax cliff coming here at the end of 2025. Tell us about it.
Lynn: The Tax Cuts and Jobs Act, which was enacted in 2017 under the last Trump administration, provided sweeping changes, primarily cuts, but also a few provisions that were enacted in order to make the law revenue neutral. More than 25 of those are set to expire at the end of this year.
For individual taxpayers, if nothing else changes, we will see an increase in marginal tax rates. The highest marginal tax rate goes from 37% to 39.6%. While some believe this will only impact high-income earners, even those in the $12,000 to $50,000 taxable income range could see a federal tax increase of up to 3%.
Another major shift: The standard deduction is going to decrease by roughly 50%. Right now, it’s $15,000 for individuals and $30,000 for married couples filing jointly, and that’s expected to drop to just under $9,000 and $16,700, respectively.
State and Local Tax (SALT) Deduction: A Hot Button Issue
Jeff: One of the most debated tax policies is the State and Local Tax (SALT) deduction cap.
For those living in high-tax states, the SALT deduction cap of $10,000 has been a major issue. Politicians from these states, regardless of party, are actively pushing to remove the cap.
Lynn: If no action is taken, that cap goes away, meaning taxpayers can once again deduct all state and local taxes paid. If the cap remains, we expect states to continue offering workarounds, such as pass-through entity tax options for business owners.
This issue is particularly important because any tax policy changes need to be revenue neutral. Some factions within Congress may even push for deficit reduction, which could further complicate negotiations.
Proactive Tax Planning: What You Can Do Now
Jeff: We’ve covered a lot about the tax landscape. Now let’s talk about what individuals and families should be thinking about in 2025.
Lynn: First and foremost, don’t panic. We have time before any major changes take effect, and policy changes require congressional approval.
Start discussions with your financial advisor. Being proactive allows for more planning options rather than reacting after changes occur. It’s crucial to have the right advisory team—wealth advisors, CPAs, and estate planning attorneys—to help navigate potential shifts.
Estate & Gift Tax Changes: Use It or Lose It?
Jeff: Another big issue: the estate and gift tax exemption. If no action is taken, the exemption amount will decrease by 50% in 2025. So, should people take advantage of the exemption now?
Lynn: Every time we’ve faced tax cliffs—2010, 2012, and beyond—we’ve advised clients not to make decisions based solely on taxes. Gifting should make sense as part of a broader financial plan. If the exemption is reduced, some individuals with taxable estates should explore gifting options, but they shouldn’t let tax considerations drive the entire decision.
Jeff: Just because you can do something for tax purposes doesn’t mean you should.
The Importance of a Coordinated Advisory Team
Jeff: Going into 2025, having a well-coordinated team of experts is essential.
Lynn: There’s too much information for one person to know it all. It’s critical to have a team that includes a wealth advisor, a CPA, and an estate planning attorney who collaborate to create a comprehensive strategy.
Jeff: This allows families to prepare thoughtfully rather than react under pressure. While tax policies may shift, having a solid advisory team in place positions individuals to make informed decisions.
Jeff: He is Lynn Evans. I am Jeff McClean. We’re Solidarity Wealth.
If you have questions about anything from this video, give us a call. Whether you’re a client or not, we love to talk, love to be helpful, and provide guidance to help families plan for the future.
