**This post is part of Avaii Insights: A Look at Financial Planning Topics - The Avaii Way—our ongoing blog series featuring insights fromthe financial planners at Avaii Wealth Management in Appleton.
Each edition offers practical guidance on topics that matter most to your financial life, all rooted in The Avaii Way: Planning Made Easy.*
Tax updates can feel overwhelming, but understanding them is essential for making smart financial decisions. For individuals, families, and business owners, the latest tax changes bring both long-term certainty and temporary opportunities worth considering. At Avaii Wealth Management, we’re committed to helping you make sense of these updates so you can align your financial plan with confidence.
Permanent Tax Changes
Federal Income Tax Brackets Made Permanent
The individual brackets from the 2017 Tax Cuts and Jobs Act (10%, 12%, 22%, 24%, 32%, 35%, and 37%) are now permanent. This stability helps with long-term income and retirement planning.
Standard Deduction Increased
$15,750 for single filers
$23,625 for heads of household
$31,500 for married couples filing jointly
These amounts will adjust for inflation annually, offering continued relief for households across the Fox Valley.
Personal Exemptions Repealed
Personal exemptions are gone permanently, but a new temporary $6,000 deduction is available for seniors (age 65+) from 2025 through 2028, with income-based limits.
Child Tax Credit (CTC)
Raised to $2,200 per child, this credit will be indexed for inflation starting in 2026—helpful for many Appleton-area families with young children.
Qualified Business Income (QBI) Deduction
Small business owners in the Fox Valley may benefit from a permanent QBI deduction, now with expanded thresholds ($75,000 single / $150,000 joint) and a minimum $400 deduction.
Estate & Gift Tax Exemptions
Exemptions jump to $15 million per individual ($30 million for couples) starting in 2026. This is a significant opportunity for estate planning, especially for business owners and families thinking about generational wealth.
Temporary Opportunities (2025–2028/29)
Higher SALT Deduction Cap
The cap rises to $40,000 ($20,000 for married filing separately) from 2025–2029, before dropping back down. This could offer relief to higher-income earners in Wisconsin who itemize deductions.
New Income Deductions
Tips: Deduct up to $25,000 of qualifying income.
Overtime: Deduct up to $12,500 (single) or $25,000 (joint).
Both deductions phase out at higher income levels.
Car Loan Interest Deduction
A new temporary provision allows deductions up to $10,000 annually for loans on U.S.-assembled vehicles—potentially relevant for many local families.
“Trump Accounts” for Newborns
Children born between 2025–2028 may qualify for a government-seeded tax-deferred savings account that transitions into an IRA at age 18.
Key Business Provisions
Bonus Depreciation & Section 179: 100% bonus depreciation is back, and Section 179 expensing limits rise to $2.5 million.
R&D Expenses: Domestic R&D costs can be fully deducted immediately.
Pass-Through Entity Tax (PTET): Workaround for SALT deductions stays intact, which may benefit LLCs and S-Corps locally.
Qualified Small Business Stock (QSBS): Gains exclusions improve for stock acquired after July 4, 2025.
Energy & Reporting Updates
Clean Vehicle Credit: Ends September 30, 2025, for EVs placed in service after that date.
Energy Credits: Home improvement and clean energy incentives expire after 2025.
IRS Form 1099: Reporting threshold rises to $2,000 beginning late 2025.
What This Means for Appleton Residents
These tax law changes create both clarity and complexity. For families, higher standard deductions and expanded credits may ease annual filings. For business owners, permanent QBI deductions and new expensing rules could create fresh opportunities. And for retirees or those nearing retirement, estate tax updates may warrant a closer look at legacy strategies.
Partnering With a Local Financial Planner
At Avaii Wealth Management, we work every day with Appleton-area families and business owners to turn complex tax changes into clear, actionable strategies. Whether you’re planning for retirement, managing a business, or considering your estate, our team is here to guide you.
👉 Next Step: Schedule a conversation with one of our Appleton-based financial planners to explore how these updates fit into your financial future.
Hey there! Thanks for stopping by our blog. A quick heads-up: the information here is more like friendly tips than personalized financial advice. Investing can be a bit of a wild ride, and what worked before might not be the golden ticket for the future. So, before making any major money moves, it's always a good idea to have a friendly chat with a financial professional. We're all about providing insights, not making promises. Your unique financial journey is key, and we're delighted to have you on board for the journey.