Navigating the new tax law: Tips for maximizing new deductions

The recent changes in U.S. tax laws present both opportunities and challenges for investors, particularly as many provisions will take effect in the 2025 tax year. One notable change is the temporary increase in the state and local tax (SALT) deduction cap from $10,000 to $40,000, offering significant savings for those below certain income thresholds. For seniors aged 65 and over, a new deduction can be leveraged alongside existing deductions to maximize tax efficiency.

However, these benefits are subject to phase-outs based on modified adjusted gross income (MAGI), necessitating strategic planning around income realization. For instance, actions like Roth IRA conversions or property ownership via non-grantor trusts could impact eligibility for these deductions if not carefully managed. Given the complexity of these provisions and potential impacts on overall financial plans, consulting with a qualified tax advisor is crucial to navigate this evolving landscape effectively.