{"id":6380,"date":"2024-04-01T13:00:52","date_gmt":"2024-04-01T10:00:52","guid":{"rendered":"https:\/\/ch.jfdi.cc\/?p=6380"},"modified":"2024-04-01T13:00:52","modified_gmt":"2024-04-01T10:00:52","slug":"tax-breaks-the-rich-wont-be-able-to-get-starting-in-2025","status":"publish","type":"post","link":"https:\/\/ch.jfdi.cc\/?p=6380","title":{"rendered":"Tax Breaks the Rich Won\u2019t Be Able To Get Starting in 2025"},"content":{"rendered":"<p><span class=\"caas-author-byline-collapse\"><span class=\"aol-attr__author--title\">Gabrielle Olya<\/span><\/span>March 27, 2024 at 5:00 PM<\/p>\n<figure class=\"caas-figure\"><figcaption class=\"caption-collapse\">EXTREME-PHOTOGRAPHER \/ iStock\/Getty Images<\/figcaption><\/figure>\n<p>The passage of the Tax Cuts and Jobs Act in 2017 marked the largest overhaul of the tax code in three decades. However, many of the tax benefits created by the act are set to expire in 2025, including many that have benefited high-net-worth individuals and families.Here\u2019s a look at the tax breaks wealthy Americans may no longer be able to take advantage of starting in 2025, plus, how they can start preparing for possible tax changes.<strong>Find Out: 5 Presidents Who Raised Taxes the Most, and 5 Who Lowered Them<\/strong><br \/><strong>Read Next:Owe Money to the IRS? Most People Don\u2019t Realize They Should Do This One Thing<\/strong><\/p>\n<h2>Income Tax Rates Will Increase and the Standard Deduction Will Be Reduced<\/h2>\n<p>High-net-worth individuals are likely in for a larger tax burden as the Tax Cuts and Jobs Act provisions expire.\u201cIncome tax rates will return to 39.6%, a 2.7% increase,\u201d said Jose Reynoso, director of personal financial planning and advanced tax and estate planning for Citizens Private Wealth. \u201cAlso, the standard deduction will be reduced, meaning the high-net-worth [individuals] will be taxed at a higher rate. The Alternative Minimum Tax (AMT), which helps ensure all individuals pay a set minimum of taxes, will apply to more people due to lower exemptions and other changes, potentially creating a higher tax burden.\u201d<\/p>\n<h2>Additional Income Tax Provisions Will End<\/h2>\n<p>Reynoso added that other income tax provisions will end, including the Qualified Business Income (QBI) deduction.\u201c[This] allows eligible taxpayers to deduct 20% of QBI under specific circumstances,\u201d he said. \u201cThe sunset will also create uncertainty around whether Qualified Opportunity Fund (QOF) investments, which can temporarily defer \u2014 and, potentially, permanently exclude \u2014 tax on certain eligible gains, will continue to be permitted.\u201d<strong>Learn More: IRS Increases Gift and Estate Tax Exempt Limits \u2014 Here\u2019s How Much You Can Give Without Paying<\/strong><\/p>\n<h2>The Estate Tax Exemption Will Be Reduced<\/h2>\n<p>Reynoso said that \u201cthe biggest issue for ultra-high-net-worth individuals will be the end of the high estate tax exemption.\u201d\u201cThe applicable exclusion amount will go from $13.61 million in 2024 to approximately $7 million,\u201d he said. \u201cThis means that the very wealthy will be able to pass about half as much to their loved ones without it being taxed.\u201d<\/p>\n<h2>How To Prepare For Tax Changes<\/h2>\n<p>While it\u2019s possible that Congress could extend the provisions laid out in the Tax Cuts and Jobs Act, it\u2019s best for wealthy Americans to plan in advance for these changes.\u201cFrom an income tax perspective, the strategies will be somewhat limited, with a focus on the timing of income as rates are set to increase,\u201d Reynoso said. \u201cHowever, clients may also consider basis-building strategies to mitigate the impact of higher income taxes, while also considering the \u2018step-up\u2019 in basis at death. In some cases, a Roth conversion strategy may be considered to create future tax-free withdrawals.\u201dIt\u2019s also important to factor in possible taxation changes when making estate planning decisions.\u201cFrom an estate planning perspective, anything above $7 million is a \u2018use it or lose it\u2019 scenario for the very wealthy,\u201d Reynoso said. \u201cFor those clients and families who desire, are willing and able \u2014 [i.e.], have the financial wherewithal and independence \u2014 to give materially over $7 million, strategies such as [spousal lifetime access trusts] (SLATs), grantor trusts, multigenerational planning involving leveraged gifts, perhaps in combination with sales, and family partnerships\/LLCs will be front and center.\u201d<strong>More From GOBankingRates<\/strong>This article originally appeared on GOBankingRates.com: Tax Breaks the Rich Won\u2019t Be Able To Get Starting in 2025<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Tax Cuts and Jobs Act passed in 2017 will expire in 2025, leading to increased income tax rates, reduced standard deductions, and the end of certain tax benefits for high-net-worth individuals. The estate tax exemption will also be reduced. Wealthy Americans should start preparing for these changes by considering income tax strategies and estate planning options.<\/p>\n","protected":false},"author":6,"featured_media":6381,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"Default","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[4039,186,2692,2459,4081,4506,2294,3398,1823,3752,28,4304,2628,1267,1065,4505,4507,3358,1183,2442],"class_list":["post-6380","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-other","tag-building","tag-business","tag-death","tag-family","tag-future","tag-high-net-worth-individuals","tag-income","tag-income-tax","tag-increase","tag-investments","tag-jobs","tag-minimum-tax","tag-money","tag-presidents","tag-tax","tag-tax-breaks","tag-tax-changes","tag-tax-cuts","tag-taxes","tag-wealthy-americans"],"acf":{"keyphrase":"","keywords":"","sourceimg":"","country-category":""},"yoast_head":"<!-- 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