Insights

As 2025 unfolds, financial advisors are facing a landscape of significant change—from the sunset of key provisions in the 2017 Tax Cuts and Jobs Act to evolving IRS enforcement priorities, trade policy shifts, and ongoing market volatility. For advisors, this isn’t just about staying informed—it’s about staying ahead. Clients will be looking to you for clarity, context, and confident guidance as these developments unfold. This update highlights what’s on the horizon and how you can begin preparing your clients—and your practice—for what’s next. Sunset Provisions Looming (2026): Many provisions from the 2017 Tax Cuts and Jobs Act are set to sunset after 2025, including: Reversion to prior individual income tax brackets Reduction of the standard deduction Return of personal exemptions Decrease in estate and gift tax exemption (from ~$13.6M to ~$6.8M per person) Potential cap changes to QBI deductions for pass-through entities You’ll want to encourage clients to review estate plans, Roth conversion strategies, and gifting plans while the higher thresholds are still in place. IRS Enforcement and Audit Risk IRS continues ramping up audits on high-income individuals and partnerships due to funding from the Inflation Reduction Act. Crypto reporting enforcement is slated for expansion in 2025, with new 1099-DA rules expected soon (though guidance is still being finalized). Ensure high-net-worth clients have strong documentation and tax planning, especially if they hold complex assets. Ongoing Implementation of  SECURE Act 2.0 2025 is a pivotal year for provisions, including: Higher catch-up contributions for those 60–63 (delayed to 2026 but still anticipated) Mandatory Roth catch-up contributions for high earners (delayed, but advisors should prep now) Automatic enrollment and portability rules for retirement plans are coming into sharper focus State-Level Tax Changes Noteworthy state tax shifts include: California: Push for wealth tax and changes to capital gains discussions New York: Adjustments to corporate and high-income tax brackets Arizona, Iowa, and others: Flat tax or lower income tax structures, phasing in For clients considering relocation or domicile changes, now’s the time to model the impact. Market Trends and Economic Signals Interest rates: The Fed has held rates steady, with possible cuts anticipated in late 2025 depending on inflation and employment trends. Election Year Volatility: Markets may experience swings as we approach November, which is a good time to remind clients about long-term positioning. Real Estate Watch: Residential and commercial markets are diverging, so opportunities in private credit and alternatives may become more compelling. Trump Tariff Overview In April 2025, President Trump enacted sweeping tariffs under the International Emergency Economic Powers Act (IEEPA), introducing a 10% baseline tariff on all U.S. imports, with higher rates up to 145% on goods from countries with significant trade deficits, notably China. These measures sparked legal challenges, with plaintiffs arguing that the tariffs overstep executive authority and could harm the economy. Economic Impact: Inflation: Despite initial concerns, U.S. inflation has remained subdued, with the Consumer Price Index rising at a 2.3% annual rate in April. This unexpected trend is attributed to companies stockpiling goods before the tariffs took effect. Consumer Costs: As inventories deplete, prices are expected to rise. Economists estimate a 1.7% price increase this year, translating to an average $2,800 burden per household. Market Volatility: The tariffs introduced uncertainty, leading to stock market fluctuations and concerns over potential recession risks. Over the past few weeks, President Trump’s administration has finalized several trade agreements: United Kingdom Tariff Adjustments: The U.S. has reduced tariffs on British steel and aluminum, and lowered car tariffs from 25% to 10% for up to 100,000 vehicles annually. U.K. Concessions: In return, the U.K. agreed to eliminate its 19% ethanol tariff and align its aluminum and steel tariffs with U.S. rates. WSJ China Temporary Tariff Reduction: A 90-day agreement reduces U.S. tariffs on Chinese goods from 145% to 10%, excluding a 20% tariff on fentanyl-related products. Reciprocal Measures: China has implemented similar tariff reductions, easing tensions between the two nations. Reuters Switzerland Trade Agreement: A new deal focuses on securing supply chains and encouraging local production, though specific details are pending. Reuters India Ongoing Negotiations: Discussions are underway to establish a trade agreement, with expectations of finalization in the coming weeks. As we move through a year of transition, your role as an advisor has never been more critical. By staying proactive and translating complexity into clear, client-focused strategies, you can turn uncertainty into opportunity and position your clients (and your practice) for long-term success.

Watch the Replay of Holistiplan's 2023 Tax Planning Summit over 3,400 advisors attended!

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A Huge New Hybrid RIA Emerges, Women-Led Firms Conduct Strategic M&A And Three Big Firms Make Executive Promotions From Within. Journey Strategic Wealth Brings On Three Advisory Teams With $210 Million In Assets. Woman-led Journey Strategic Wealth (JSW) is adding three teams with six advisors, representing a combined $210 million in new AUM for the boutique financial advisory firm. Richmond, Virginia-based Mark Newfield, Seattle-based Laurie Adams and traveling advisor Kathleen Barlow bring their practices to JSW, which itself has offices in Summit, New Jersey, and Alamo, California. Newfield’s team also includes advisor Angela Lessor, financial planner Melissa Clark and operations leader Danielle Handshaw.