Navigating the 2025 Tax Landscape – Keiter Knowledge Sharing

Highlights from Keiter’s Fall Seminar

The tax world is evolving, and the passage of H.R.1 (OBBBA) brings sweeping changes for individuals and businesses. At Keiter’s 2025 Fall Seminar, our tax specialists, Jen Flinchum, CPA, CFP® and Ryan Beethoven-Wilson, CPA discussed the new provisions, offering guidance and planning strategies to help taxpayers make the most of the new law.

Business tax provisions

Effectively managing Adjusted Gross Income (AGI) helps to maximize tax benefits under the new law. Multi-year planning has become increasingly important, particularly for deductions and credits that have phaseouts. Taxpayers are encouraged to review their estate plans, charitable giving strategies, and business structures to ensure alignment with recent legislative changes. Businesses should also take advantage of expanded expensing and depreciation rules, while remaining vigilant regarding evolving compliance requirements.

Key points for businesses to consider:

Depreciation & Expensing

• 100% bonus depreciation is extended for qualifying properties.
• Section 179 expensing maximum increases to $2.5 million, indexed for inflation.
• Special depreciation allowance for qualified production property is available through 2030.

Research & Development

• An immediate deduction for domestic R&D expenses is available, however, foreign research must still be capitalized.
• Large businesses can opt for catch-up deductions for unamortized R&D.

Interest Deduction & Stock Exclusion

• Business interest limitation rules revert to earlier TCJA standards, allowing more deductions.
• The Qualified Small Business Stock (QSBS) exclusion is increasing, with higher asset limits and inflation indexing.

Compliance and Reporting

• Meals provided for employer convenience are no longer deductible starting in 2026.
• Form 1099-K reporting thresholds increase, reducing compliance burdens for small businesses.
• All federal payments, including IRS refunds, must be made electronically starting October 2025.

Other Business Updates

• Excess business loss limitation is made permanent.
• Charitable contributions for businesses must exceed 1% of taxable income, with a 10% cap and five-year carryforward.
• Qualified Opportunity Zones (QOZ) rules are updated, with new incentives for rural investments and stricter reporting.

Individual tax provisions

The 2025 tax law changes bring updates including a higher estate and gift tax lifetime exemption, revised income tax rates and deductions, and new limits on itemized deductions. Key adjustments affect mortgage interest and charitable giving, while personal exemptions are eliminated and the Qualified Business Income deduction is preserved.

Families benefit from increased credits and savings opportunities, such as a larger Child Tax Credit, expanded dependent care benefits, and more flexible 529 plans. These reforms aim to broaden tax relief, incentivize charitable contributions, and simplify compliance.

Key points for individuals to consider:

Estate & Gift Tax Lifetime Exemption

• The lifetime exemption rises to $15 million per taxpayer starting in 2026, indexed annually for inflation.
• Portability still applies and trusts continue to offer liability protection.
• Many taxpayers will no longer face estate tax, but estate planning is still essential.

Income Tax & Deductions

• Ordinary income tax rates range from 10% to 37%, with broader brackets and inflation adjustments.
• The higher standard deduction provides a good tax shield for those without a mortgage or larger charitable donations.
• Temporary extra deductions for taxpayers age 65+ are available from 2025–2028.

Itemized Deductions

• Miscellaneous itemized deductions (e.g., tax prep fees, unreimbursed employee expenses) are eliminated.
• The Pease limitation is removed, but a new cap reduces the benefit of itemized deductions for high-income taxpayers.
• The SALT deduction cap increases temporarily through 2029, then returns to $10,000.

Charitable Giving

• New credits for K–12 scholarship donations and expanded charitable deductions for nonitemizers.
• Itemizers face a 0.5% floor on charitable deductions starting in 2026.

Interest Deductions

• Mortgage interest deduction is limited to $750,000 of acquisition debt; home equity interest is excluded unless used for improvements.
• Car loan interest deduction for new vehicles is introduced for 2025–2028.

Credits and Savings for Families

• Child Tax Credit increases to $2,200 per child, with higher phaseout thresholds.
• Dependent Care FSA limits rise, and the Child & Dependent Care Credit increases to 50% of qualifying expenses.
• 529 plans now cover more educational expenses, including K–12 tuition up to $20,000, and allow limited ROTH conversions.

Other Notable Changes

• Personal exemptions are eliminated.
• Qualified Business Income (QBI) deduction remains at 20%, with expanded phase-in ranges and a new minimum deduction.
• Above-the-line deductions for tips and overtime pay are available from 2025–2028.
• Alternative Minimum Tax (AMT) exemption and phaseout thresholds revert to 2018 levels, with a higher phaseout rate.

The 2025 tax changes present both opportunities and challenges. Proactive planning and a clear understanding of the new rules can help individuals and businesses optimize their tax positions. For tailored advice and up-to-date guidance, connect with your Keiter Opportunity Advisor | Call 804.747.0000.