2025: The Year in Review

Jan 23, 2026 | Investing

Every January, it’s customary to look back on the year that was. What were the highlights? What were the “lowlights”? What events will we remember? Most importantly, what did we learn?

When I play back the last twelve months in my head, the theme of 2025, to me, can be summed up by three words, three dates, and three numbers:

Words Dates Numbers
Slop February 19 6144
Rage bait April 8 4982
Six-seven December 26 6945

 

LET’S START WITH THE WORDS

In December, three of the world’s most popular dictionaries selected their “word of the year.” Merriam-Webster chose slop: digital content of low quality that is produced usually in quantity by means of artificial intelligence.1

The Oxford Dictionary chose rage bait: Online content deliberately designed to elicit anger or outrage by being frustrating, provocative, or offensive, typically posted to increase traffic to or engagement with a particular web page or social media content.2

Finally, Dictionary.com selected six-seven (sometimes written as “67” but not to be confused with the number “sixty-seven”). Confused? So’s everybody else. Even the dictionary experts didn’t really know what to make of it, defining it as “a viral, ambiguous slang term” and describing it as “meaningless, ubiquitous, and nonsensical.”2 In other words, it doesn’t really mean anything.

If you’ve been online at all this year, you’ve likely encountered at least one of these words. You may have seen AI slop in the form of fake, low-effort pictures and videos. You’ve likely come across rage bait in the form of an inflammatory Facebook post or fear-mongering news headline. And you may have seen one of the “six-seven” memes floating around social media.

Normally, I don’t pay much attention to the word of the year. This time I was struck by something. When you get right down to it, all three words are about things that are fake. Not just in the sense that they often represent things that don’t exist, but in the sense that they are almost never genuine.

Between videos on social media, headlines meant to provoke, and the volume of information available, so much of our time is spent trying to detect what’s true, what’s being exaggerated, and what’s downright fabrication. Those three words sum up just how much around us, especially on our devices, is fake…and how exhausting and demoralizing it can be to detect them.

DIGITAL NOISE AND MARKET UNCERTAINTY

What does this all have to do with finance? Well, thinking about it made me realize how much time investors can spend trying to figure out what is genuine and what isn’t.

Rewind back to the start of 2025 when investor sentiment was mixed. There was hope about the prospect of cooling inflation, falling interest rates, and lower taxes, but concern about the possibility of tariffs and a new trade war with China. President Trump had repeatedly threatened a variety of tariffs on China, Canada, Mexico, and other countries. Would he do it? How would other countries respond? What kind of impact would it have? Was it real, exaggerated, or all just a bluff?

Macroeconomics can be difficult for investors to understand. The economy and the stock market are not the same, but they can indirectly affect each other. I remember the questions nearly every market commentator was asking at the beginning of 2025: How will tariffs impact inflation? How will inflation influence interest rates? What will interest rates do to consumer spending? How much will spending continue to drive economic growth? We considered those questions, too. But investors can easily twist themselves into knots trying to figure out what matters and what doesn’t.

THREE DATES & THREE NUMBERS THAT SHAPED THE YEAR

By February 19, despite a flurry of tariff announcements from the White House, most investors decided to shrug off all the trade war talk. The S&P 500 reached 6,144, its second record high in two days, boosted by the hope that tariffs were more a bargaining chip than a reality.3 It would be the last one for a while.

On April 8 the S&P closed at 4,982, nearly 19% below its February 19th high.3 President Trump’s promise of “Liberation Day” tariffs, a broad and historically high slate of import duties on China, the European Union, and other countries had so spooked investors that the S&P’s value had slid all the way back to where it had been a year prior.

Investors wondered: Is this a real bear market, or just a correction? Are the tariffs permanent or temporary? Everywhere you looked, there were headlines, videos, podcasts, and posts with different information, often with titles like “The Markets Are Just Like They Were in 19XX. Here’s What Experts Think You Should Do Next.” Or “The Last Time the Markets Did X, Y Happened.” What was real? What was exaggerated? What was fake?

And now to the third date: December 26. The S&P 500 hit its most recent all-time high of 6,945.3 (As of this writing – that number may be different by the time you read this.) The index later closed the day slightly lower, but for a brief moment, it was up a staggering 39% from where it landed on April 8.

A YEAR OF EMOTION, ADJUSTMENT, AND RECOVERY

What prompted this incredible turnaround? If I had to sum it up in a single sentence, it would be, “The normalization of things that previously caused uncertainty.” As many of the Liberation Day tariffs were canceled, suspended, or lowered, investors got used to the idea, emotions settled down, and the markets normalized. That enabled investors to turn their attention to other things, like falling interest rates and investments into AI by tech companies.

The end result: 2025 was a fascinating and ultimately highly positive year for stocks.

But what was interesting about December 26 isn’t that the S&P hit an all-time high. That’s a common occurrence in a bull market. What was interesting is that gold also hit an all-time high on the very same day…something that hasn’t occurred since 1975.4 Gold is often used as a hedge against stock market volatility, so for both stocks and gold to hit record highs at the same time suggests many investors are feeling cautious about the future despite the stock market’s success. The cycle begins again: What’s real and what isn’t? What’s signal and what’s noise?

All of these questions are difficult enough. But modern investors also have to contend with other distractions. You wouldn’t have to look hard, on any given day, to find hundreds of articles, videos, podcasts, and posts all designed to confuse you. “Invest in X / Don’t invest in Y.” “It’s time to buy / It’s time to sell.” “Here’s what experts think you should know / Here’s what the experts don’t want you to know.” Some of this can be helpful…but much of it is slop, rage bait, or just plain wrong.

What’s an investor to do when confronted with all this confusion and noise? This brings me to what I think is the real theme of 2025, the most important lesson the year can teach us: 

Success isn’t about constantly trying to detect what we think is fake.

It’s about valuing what we know is real.

WHAT DO WE KNOW IS REAL? 

Let’s start with the dreams and goals you’ve had for years. Those are far more tangible and significant than anything digital could ever be. By focusing on why we invest — for the places you want to see, skills you want to learn, milestones you want to reach, and the people you want to do it all with — we prioritize the meaningful over the distractive. Distractions like daily market movements or the bewildering deluge of slop and rage bait we are flooded with every day.

Another thing? Cornerstone’s investment process. A process far more tried and proven than trying to decipher headlines or wrestling with probabilities could ever be. By focusing on the process we know to work, we can rely on the principles we know to be real…like diligence, patience, and discipline. That’s why we didn’t need to predict everything that would happen in order to have a successful year as investors. We just needed to hold to our process.

And of course, there’s the most real thing of all: The people and relationships that bring true meaning to your life. There are so many voices vying for our attention – on our phones, TVs, car radios, and social media feeds.

The more we tune them out and focus instead on the people who we know care about us, the more we fill our days with all that is genuine and authentic, the more everything that’s fake, frustrating, and unreliable gets filtered out. Slop, rage bait, it all just…fades away.

That’s why I’ve chosen a new “word of the year” for 2026 – meaningfulness. For the more we hold to that word, the more we prioritize it in thought and deed, the more we will know that we are truly on the right path…to the life we were always meant to live.

It was our honor to serve you this past year. We look forward to serving you for many more years to come. Here’s to a happy and meaningful 2026!

 

Warmly,

Gordon Wollman, MS-Financial Planning, CFP®

Founder & CEO, Cornerstone Financial Solutions

Wealth Advisor, RJFS

Sources

1 “2025Word of the Year: Slop,” Merriam-Webster, https://www.merriam-webster.com/wordplay/word-of-the-year

2 “2025’sWords of the Year, So Far,” Time, https://time.com/7334730/word-of-the-year-2025-cambridge-collins-dictionary-oxford-merriam/

3 “S&P500 Historical Data,” Investing.com, https://www.investing.com/indices/us-spx-500-historical-data

4 “TheS&P 500 and Gold Are at Record Highs,” Barrons,  https://www.barrons.com/livecoverage/stock-market-today-122625/card/the-s-p-500-and-gold-are-at-record-highs-that-s-not-supposed-to-happen–Ras47ZC0A5FwZ556upxY

 

Raymond James advisors do not provide tax or legal services, you should discuss these matters with the appropriate professional.

Any opinions are those of the author and not necessarily those of Raymond James. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. There is no guarantee that these statements, opinions or forecasts provided will prove to be correct. Investing involves risk and you may incur a profit or a loss regardless of strategy selected. No investment strategy can guarantee your objectives will be met. Past performance is no guarantee of future results. Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment decision.

The S&P 500 is comprised of approximately 500 widely held stocks that is generally considered representative of the U.S. stock market. It is unmanaged and cannot be invested into directly. CSP #975954 Exp. 1.6.31.

2026 Depreciation & Business Expensing Updates

Nov 23, 2025 | Taxes

Why the 2026 Rules Matter for Business Owners

Beginning in 2026, business owners will navigate new depreciation and business-expensing rules under the One Big Beautiful Bill Act. Understanding these updates—and how Section 179 strategies work alongside bonus depreciation—can help business owners make well-timed decisions that shape multi-year tax outcomes. The timing of when property is placed in service—not just purchased—can make a meaningful difference in lowering taxable income and aligning year-end planning.

Families with rental properties or side businesses may also benefit from understanding how these provisions impact equipment purchases and facility improvements.

 

100% Bonus Depreciation Returns in 2026

Bonus depreciation is fully restored for qualified property beginning in 2026, allowing businesses to deduct the entire cost in the year the asset is placed in service.

 

What Qualifies for 100% Bonus Depreciation

  • Equipment, machinery, vehicles, software, and other property with a MACRS life of 20 years or less
  • Property acquired and placed in service after January 19, 2025
  • Property used in the United States or U.S. possessions

 

The TCJA phase-down schedule (80%, 60%, 40%, 20%) no longer applies to newly qualified property.

 

Why This Matters for Your Tax Planning

Bonus depreciation can:

  • Create immediate deductions
  • Offset higher-revenue years
  • Increase planning flexibility
  • Support reinvestment or growth strategies

 

Higher Section 179 Expensing Limits

Section 179 remains a powerful planning tool for expensing certain equipment and improvements immediately, within annual income limits.

 

Key Changes for 2026

  • Increased deduction limits for property placed in service after December 31, 2024
  • 2026 limits indexed for inflation
  • Valuable when bonus depreciation is not available or when owners want to tailor deductions more precisely

 

Section 179 continues to include:

  • Annual business income limitations
  • Phase-out thresholds tied to total equipment purchases

 

Enhanced Depreciation for Qualified Production Activities

Businesses expanding or modernizing production facilities may receive enhanced depreciation for certain non-residential real property.

 

To Qualify, Property Must:

  • Begin construction between January 20, 2025 – December 31, 2028
  • Be placed in service before January 1, 2031

 

Eligible improvements may support:

  • Facility modernization
  • Production expansion
  • Specialized building construction

 

 

How 2026 Rules Coordinate With Existing Depreciation Frameworks

Despite new incentives, familiar rules still apply. Coordinating these rules correctly helps avoid surprises and optimize timing.

  • Standard MACRS conventions (half-year, mid-quarter, mid-month)
  • Interaction between Section 179 and bonus depreciation
  • Potential for deductions to create or amplify losses
  • Tax outcomes influenced by entity type and long-term planning goals

 

Planning Considerations for 2026

The most significant opportunities—and most common mistakes—center on timing.

 

Why Timing Matters

  • Assets must be placed in service before year-end to qualify
  • Delivery, installation, or setup delays can affect eligibility
  • Bonus depreciation may create losses that are either advantageous or limiting

 

Other Planning Factors

  • Succession and transition: Larger deductions may reduce current income but affect basis
  • Cash flow: Deductions should support—not strain—operations
  • Financing: Borrowing for equipment may still qualify, but repayment schedules and cash flow should align with long-range goals

 

 

Cornerstone Guidance: Aligning Purchases With Multi-Year Planning

Thoughtful timing can make a meaningful difference in multi-year tax outcomes. When income is higher, or expected to rise, equipment purchases or facility upgrades may help reduce taxable income, smooth earnings, and support strategic planning.

Strategic planning may allow you to:

  • Reduce taxable income in high-revenue years
  • Smooth income for future Roth conversion opportunities
  • Support cash-flow planning during acquisitions or upgrades
  • Align equipment decisions with retirement or succession timelines

 

Our advisors work with clients to bring every part of their financial plan together, including tax planning. Schedule a strategic review of your plan to see how a more coordinated approach could benefit your strategy.

SCHEDULE AN APPOINTMENT

Or contact us:

605-357-8553 in Sioux Falls

605-352-9490 in Huron

cfsteam@mycfsgroup.com

Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. CSP #944320. Exp. 11.21.26.

Choosing the Right Charitable Vehicle for Your Goals and Needs

Nov 19, 2025 | Estate Planning

Why Your Giving Strategy Matters

As people grow older, gratitude often inspires a desire to give back. Thoughtful charitable giving strategies add purpose to wealth—they allow you to share your blessings and create a lasting impact.

But while generosity comes from the heart, the smartest giving strategies also engage the head. Just like different vehicles serve different purposes—a truck for towing or a van for families—different charitable vehicles serve different philanthropic and financial goals.

Whether you’re just beginning to explore charitable giving or reviewing an existing plan, choosing the right charitable vehicle can help you give effectively while also aligning with your financial and tax situation.

 

Donor Advised Funds (DAFs): Flexible and Accessible

A Donor Advised Fund (DAF) acts like a charitable investment account, allowing you to contribute cash, stock, or even alternative assets. Contributions are tax-deductible—up to 60% of your adjusted gross income for cash gifts.

Advantages:

  • Flexibility: No deadline for donating funds, so you can plan gifts over time.
  • Collaboration: Multiple family members can contribute to the same fund.
  • Simplicity: Lower administrative burden compared to a foundation.

Considerations:

  • Irrevocable: Once donated, funds can’t be reclaimed.
  • Limited control: You can suggest how funds are used, but final decisions rest with the charity.

 

Private Foundations: Control and Legacy

A Private Foundation gives donors full control over how assets are invested and distributed. It can be established by an individual, family, or corporation and can continue indefinitely, creating a lasting legacy.

Advantages:

  • Complete control over charitable direction and investments.
  • Legacy-building: The foundation can exist for generations.

Considerations:

  • Complex setup and ongoing management requirements.
  • Annual IRS filings and oversight by a board of directors.

This vehicle suits those who want a hands-on role in managing their charitable mission.

 

Charitable Remainder Trusts (CRTs): Giving That Pays You Back

A Charitable Remainder Trust (CRT) allows you to donate assets into a trust while receiving annual income from it for a set period. When the term ends, the remaining assets go to your chosen charity (or even your own foundation).

Advantages:

  • Provides an income stream for life or a set number of years.
  • Enables significant charitable gifts without disrupting your cash flow.

Considerations:

  • Requires legal guidance and careful structuring.
  • Irrevocable once established.

 

Charitable Lead Trusts (CLTs): A Legacy for Both Family and Charity

A Charitable Lead Trust (CLT) works in reverse of a CRT. The charity receives payments first for a set number of years, and what’s left eventually goes to your heirs, often with reduced estate or gift taxes.

Advantages:

  • Balances philanthropy with family wealth transfer.
  • Potential estate and gift tax benefits.

Considerations:

  • Structurally complex and irrevocable.
  • Requires professional coordination with your attorney and financial team.

 

How to Decide Which Vehicle Fits You

Your ideal charitable giving strategy depends on:

  • Your giving goals:Do you want to give now, later, or leave a legacy?
  • Your financial picture:How important are tax benefits or ongoing income?
  • Your desired level of control:Do you prefer simplicity or hands-on management?

A thoughtful charitable plan aligns both your generosity and your financial goals—maximizing your impact while supporting the causes that matter most.

If you’d like to explore which charitable giving vehicle best suits your goals, reach out to discuss your options with your Cornerstone team.

Opinions expressed in this article are those of the author/speaker and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. The foregoing is not a recommendation to buy or sell any individual security or any combination of securities. CSP #934339. Exp. 11.18.26

Understanding the 2025 U.S. Government Shutdown

Oct 7, 2025 | Investing

On Wednesday, October 1, Americans woke up to the news that their government had shut down.1 It is the first such shutdown since 2018, although there have been plenty of near-misses in recent years. In this case, both parties rejected last-minute proposals and counterproposals to fund the government, with the major sticking point being healthcare.

 

What exactly does this mean?

As you know, whenever Congress authorizes a law, the government must spend money to enact it. Sometimes, the authorization doesn’t contain provisions to fund the law so a second piece of legislation is required, known as an appropriations bill. This is where Congress separately appropriates money specifically for the new law.

These appropriations must be renewed, usually by October 1 each year, for the law to remain funded. This is what’s known as discretionary spending, because Congress decides upon its own discretion whether to continue funding the law. Currently, there are twelve appropriations bills that Congress must pass every year. These bills cover defense spending, national parks, food safety, passport applications, airports, and much more. 2

However, as political partisanship has grown so extreme in recent years, it’s become nearly impossible to pass these bills in a timely manner. Instead, Congress usually attempts to package each piece of legislation into a single omnibus bill. And when that doesn’t work, lawmakers turn to something called a continuing resolution (C.R.), which is a temporary spending bill that essentially keeps all government agencies operating at their existing funding levels.

As of this writing, Congress has not been able to agree on any of these options. (Technically, the House did pass a continuing resolution, but it failed in the Senate.) There are many points of contention, but the biggest has to do with healthcare. Specifically, the expiration of enhanced premium tax credits. These credits, designed to help lower income people afford coverage, were first put in place by the Affordable Care Act. They were then expanded by legislation passed during the pandemic. But those credits expire at the end of 2025, meaning that millions of Americans who relied on them to afford coverage may suddenly be without healthcare. That, in turn, may cause premiums to rise for nearly everybody else. Certain people with lower incomes, for example, may see their costs go up by 75% or more.2

Democrats refused to vote for any plan that didn’t extend these credits. Their reasoning is that if the issue is not taken care of now, millions may lose coverage or have to pay more than they can afford. Republicans, on the other hand, contend these credits add to the deficit, were never designed to be permanent, and should be dealt with separately. Both sides have an argument — it’s simply a matter of differing priorities. But, both see this as an opportunity to cast blame on the other and score political points.

 

What happens now?

Because of this gridlock, many aspects of the government that fall under the umbrella of discretionary spending can no longer be paid for. As a result, agencies must shut down all “nonessential services” — although what that means can vary dramatically depending on the agency or service in question. Some services, which are simply too vital to ever stop operating, will continue, although they may not work as fast or efficiently as normal. Think law enforcement. Forest service. Firefighting. Air traffic control. (This may be the single biggest one, so more on this in a minute.) Much of the National Weather Service. You get the idea. However, many people who do these jobs will not get paid, or will be paid much less, until Congress acts.

Other agencies will be hit even harder. Over 75% of employees in the Labor, Commerce, and Education departments have been furloughed. The Environmental Protection Agency, has sent a whopping 89% of its employees home.3 Some agencies, like the IRS, will be able to hold out for longer due to special contingency plans, but those often cover only a week or so before they, too, will be forced to send workers home.

Other government operations, meanwhile, fall under the umbrella of mandatory spending. These are for certain laws and programs that are not required to be renewed annually. (Think Social Security benefits, Medicare, and Medicaid.) These programs will continue operating during a shutdown. Unfortunately, many employees who oversee these programs will be sent home. As a result, there may be delays in helping citizens who need to interact with these services in some way.

The shutdown will continue until Congress either authorizes a new C.R. or begins passing individual appropriation bills. It’s impossible to know exactly how long this will take, but it’s worth noting that shutdowns usually don’t last very long. Most, in fact, only go on for a day or two. But sometimes, shutdowns can drag on for weeks. In 2013, for example, we experienced a 16-day shutdown.4 And, from December 2018 through January 2019, the government shut down for 35 days.4

 

How might it affect the markets?

Shutdowns can cause major disruptions to important services, and they’re especially hard on the people who actually keep our country running. (For this reason, let’s all spare a thought for those government employees who get furloughed during the holidays.) That said, they typically do not have a major impact on the overall economy, usually because they don’t last very long. Shutdowns don’t tend to directly affect the markets, either.

Data suggests the S&P 500 has fallen “an average of 0.4% in the week before a shutdown and gained a total of 0.1% over the length of all shutdowns since 1976.”5 And there has historically been no lasting damage, either, with the S&P 500 rising “about 12% in the 12 months following [a shutdown].”6 Not surprising, considering the markets react to many factors. Important as it is, a shutdown is only one of them. Quite frankly, it’s rare for just one event to have a lasting impact on stocks, even if media headlines suggest otherwise.

That said, shutdowns shouldn’t be taken lightly, either. If prolonged, the effects begin to compound. For example, the last full shutdown, in 2018, lasted for thirty-four days. Towards the end, air traffic controllers, who had been required to work without pay, began calling in sick in droves, resulting in major travel delays and impacts to trade. And the current shutdown comes during a time when economic uncertainty is already on the rise. Inflation has subtly but gradually ticked up this year, while the labor market has slowed down. (As of August, the unemployment rate was up to 4.3%, the highest since 2017 other than during the worst pandemic months of 2020.)7

Approximately 750,000 federal workers could be furloughed as a result of this shutdown, but in an ironic twist, we may not have another jobs report for some time, as the agency responsible for tracking that data is one of those most affected by the shutdown.1

 

Takeaway

For us as investors, there’s no reason to panic, and certainly no reason to make a major shift to our investment strategy. Again, history shows most shutdowns to be limited in duration and modest in impact. At the same time, it’s important we don’t ignore what’s going on either, as there’s simply no telling how long this shutdown will last or how deep it will run. My advice is to enjoy the changing of the season and focus more on preparing for the holidays than on what’s going on in Washington. But in the meantime, the Cornerstone Team will keep a very close eye on your behalf!

 

As always, please let us know if you have any questions or concerns.

Sources:
1“US government shutdown begins as partisan division rules Washington,” Reuters, https://www.reuters.com/world/us/us-government-beginsshut-down-most-operations-after-congress-fails-advance-2025-10-01/

2 “How much and why ACA Marketplace premiums are going up in 2026,” Peterson-KFF Health Systems Tracker, https://www.healthsystemtracker.org/brief/how-much-and-why-aca-marketplace-premiums-are-going-up-in-2026

3 “How the Shutdown Is Affecting Federal Services and Workers,” The NY Times,
https://www.nytimes.com/interactive/2025/09/30/us/politics/government-shutdown-furloughs.html

4 “How long do government shutdowns last?” NBC News, https://www.nbcnews.com/data-graphics/longest-government-shutdown-us-historypresident-administration-rcna234766

5 “Analysis: Potential US government shutdown could dent investor confidence,” Reuters, https://www.reuters.com/markets/us/potential-usgovernment-shutdown-could-dent-investor-confidence-2023-09-08/

6 “What would a government shutdown mean for markets and the economy?” NBC News, https://www.nbcnews.com/business/businessnews/government-shutdown-markets-economy-impact-rcna234643

7 “The Employment Situation — August 2025,” U.S. Bureau of Labor Statistics, September 5, 2025. https://www.bls.gov/news.release/empsit.nr0.htm

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. Past performance is not indicative of future results. Raymond James Financial Services, Inc. does not provide advice on tax or legal issues. These matters should be discussed with the appropriate professional.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Past performance may not be indicative of future results. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the authors and not necessarily those of Raymond James.

Understanding Key Tax Law Changes in the “One Big Beautiful Bill”

Jul 16, 2025 | Taxes

On July 4, President Trump signed the “One Big Beautiful Bill Act” into law, enacting sweeping legislation that makes changes to everything from the debt ceiling to Medicaid to immigration to taxes.1

While the new law is one of the most fiercely debated in recent memory, it also has many of our clients asking what it all means for them.

Rather than diving into the political debate, we want to highlight the key provisions that could affect your taxes, retirement, and other areas we regularly plan for together.

While some of it may not apply to you, it could apply to members of your family. If so, feel free to share this information with them.

If you have any questions or concerns, please reach out. Remember, the Cornerstone team is here to help provide financial clarity.

 

Changes to Tax Deductions and Exemptions

1During President Trump’s first term, Congress passed the Tax Cuts and Jobs Act, which made major changes to the tax code. Many of those changes were set to expire at the end of this year, but the BBB has made them permanent. That means all current tax rates and brackets will continue for the foreseeable future.

In addition, several tax deductions are set to increase under the BBB. 

For example:

  • The standard deduction has been raised from $15,000 to $15,750 for single individuals, and from $30,000 to $31,500 for married couples filing jointly.
  • Future increases will be indexed to inflation.

For those who choose to itemize their tax deductions:

  • The SALT (state and local tax) deduction limit is increased $10,000 to $40,000 and this deduction will increase by 1% each year until 2030, when the cap reverts back to $10,000.
  • Note that the SALT deduction begins to phase out for taxpayers earning $500,000 or more in annual income.

Lastly, the exemption on estate and gift taxes is raised to:

  • $15 million (up from $13.99 million) for singles
  • $30 million (up from $27.98 million) for married couples

 

Changes to Tax Credits1

The BBB also makes some important changes to several types of tax credits — raising one while eliminating others.

  • The child tax credit, previously set to expire, has now been permanently increased to $2,200. (Note: If you see the $2,500 figure, that was from an earlier version of the bill and is no longer accurate.)
  • The BBB eliminates several “green” tax credits:
  • Electric vehicle credits (new and used) end September 30, 2025.
  • Energy-efficient heating/cooling system credits (e.g., rooftop solar panels) end December 31.

 If you’re considering “going green,” it may be best to act soon!

 

Changes That Could (Potentially) Affect 

Social Security Taxes1

This could have been included under tax deductions, but due to its complexity, it deserves its own section.

After the BBB became law, many Social Security beneficiaries received an email stating the law would eliminate federal income taxes on Social Security benefits for most recipients.² This claim has also circulated on social media.

That statement is not entirely accurate. The BBB does not directly change how Social Security benefits are taxed.

Instead, the law creates a temporary tax deduction for seniors:

  • Individuals aged 65+ can claim a $6,000 deduction if income is $75,000 or less.
  • Married couples filing jointly can claim $12,000 if income is $150,000 or less.
  • The deduction phases out entirely at $175,000 for individuals and $250,000 for couples.

What does this all have to do with Social Security? When coupled with other types of deductions, this provision can reduce taxable income for many retirees and pre-retirees. Given that Social Security taxes are dependent on a person’s annual income, some retirees who take this deduction may find that, as a result, they no longer owe taxes on their benefits.

If you are collecting Social Security, plan to start in the near future, or know somebody who is, keep in mind that it takes some careful number crunching to determine whether this new deduction will impact taxes on your benefits. Please let us know if you have any questions.

Finally, bear in mind this new deduction isn’t permanent — it’s slated to expire after 2028.

 

Child Savings Accounts1

For those welcoming a child or grandchild between 2025 and 2028, the BBB introduces a new tax-advantaged savings account:

  • The government provides a one-time $1,000 deposit.
  • Parents and relatives can contribute up to $5,000 per year.
  • Employers can contribute up to $2,500.
  • Earnings grow tax-deferred, and withdrawals are taxed as long-term capital gains when the child turns 18.

These types of accounts can be a handy way to help children save for the future, including higher education. However, there are lots of rules regarding these accounts, and they may not always be the best option compared to other alternatives. For these reasons, let’s chat before you or your family decide to open one!

 

Conclusion

As you can see the tax law changes in the BBB could have an impact on your financial plan.

Rest assured; our team is continuing to review these provisions closely. We’ll follow up with anything new that may be relevant to you — whether through a future update or during your next review.

In the meantime, please don’t hesitate to reach out with any questions.

 

 

Sources

1 Text of “ONE BIG BEAUTIFUL BILL ACT,” Congress.gov, https://www.congress.gov/bill/119th-congress/house-bill/1/text

2 “Social Security Email About ‘Big Beautiful Bill’ Tax Changes Sparks Confusion,” Kiplinger, July 7, 2025. https://www.kiplinger.com/taxes/social-security-email-on-big-beautiful-bill-tax-changes-sparks-confusion

 

While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of Raymond James, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Material sourced by Bill Good Marketing, an independent third party.

 CSP #836829 Exp. 7.8.26