Key takeaways

  • Tax planning is important throughout the year to keep up with recent modifications to tax codes and changes in your own financial life.

  • Taxpayers should prepare for important rule changes scheduled to occur after December 31, 2025, which may result in higher taxes for some.

  • Now may be an opportune time to consider ways of positioning your portfolio for tax efficiency today and in the future.

As with many investors, it’s likely you view taxes as an important consideration when making financial decisions. You want to know how changes to the tax code, along with market and economic dynamics, might impact your taxes and, ultimately, your bottom line. It’s with investors like you in mind that we offer the following guidance.


2024 adjustments to 2023 tax brackets

Each year, tax brackets, standard deduction amounts and other important inputs to tax planning are adjusted, generally in line with changes in the cost-of-living. In a period of elevated inflation, adjustments were more significant in 2023 and 2024 than in many previous years. The following provisions apply to your 2024 income tax return (filed in 2025), depending on your filing status:


Tax brackets for 2024

Note that income is taxed on a graduated basis. For example, in the case of a married couple filing a joint return, the first $23,200 of income is taxed at the 10% federal rate. The next $71,100 (income between $23,200 and $94,300) is taxed at a 12% rate, etc.

Tax rate

Single Filers

Married filing Joint Return

Head of Household


$0 to $11,600

$0 to $23,200

$0 to $16,550


$11,600 to $47,150

$23,200 to $94,300

$16,550 to $63,100


$47,150 to $100,525

$94,300 to $201,050

$ 63,100 to $100,500


$100,525 to $191,950

$201,050 to $383,900

$100,500 to $191,950


$191,950 to $243,725

$383,900 to $487,450

$191,950 to $243,700


$243,725 to $609,350

$487,450 to $731,200

$243,700 to $609,350


Over $609,350

Over $731,200

Over $609,350

Source: Internal Revenue Service.


Standard deduction for 2024

The standard deduction represents the amount of income you can exclude from taxes before the above tax rates begin to apply. Note that an added deduction is allowed for those who are blind or over age 65.

Filing Status

Standard Deduction

For Those Blind or Age 65+

Single/Married Filing Separately


Married Filing Jointly


Head of Household



Capital gains tax brackets for 2024

It is possible for individuals with lower income to pay no long-term capital gains tax when selling appreciated assets that have been held for more than a year (long-term capital gain). For example, the 0% long-term capital gains tax applies to married couples filing a joint return with incomes of $94,050 or below.

Applicable long-term capital gains tax rate

Single filers with taxable income over

Married Couples filing Joint returns, taxable income over

Heads of Households, taxable income over














Strategies to consider

The following strategies represent potential opportunities to consider, depending on your circumstances.


Managing itemized deductions

Given current standard deduction levels, most people will not choose to itemize deductions. However, in certain years, deductible expenses may be higher, and some taxpayers may qualify to choose claiming those deductible expenditures on their tax returns. For example, in a year where you make a large, tax-deductible donation, itemizing may be advantageous. In such a year, it makes sense to try to identify other expenses that can be “bundled” into the same year in order to take full advantage of itemizing. This can include pre-paying property taxes (if allowed).


Establishing a donor advised fund

You can set aside significant sums intended for charitable organizations in a donor-advised fund (DAF). This is a charitable investment account designed to help you provide financial support over a period of years to any eligible IRS-qualified public charity. You place lump sums of cash or even long-term appreciated assets into a DAF and generally, you are eligible to claim an immediate tax deduction. Funds are invested and all earnings grow on a tax-free basis. You make grant recommendations to have money directed to qualified charitable organizations, which can occur over a period of years.


Gifting appreciated assets

If you hold assets such as stock or real estate that have appreciated significantly in value, they represent a capital gains tax liability when the time comes to sell those assets. If you have charitable gifting intentions, there can be advantages to gifting appreciated assets. Along with potentially claiming a tax deduction, you won’t need to realize the capital gains by selling the assets. Even if you don’t itemize deductions, gifting appreciated assets rather than cash reduces your capital gains tax liability. This can be an effective way to manage portfolio rebalancing while managing your tax burden by selling an appreciated investment position. In addition, because you gifted the assets, wash sale rules do not apply. Therefore, if you wish to continue owning the asset (such as a stock), you can repurchase additional shares, but at an increased cost basis, reducing future tax liabilities.


Qualified charitable distributions

An effective way to manage required minimum distributions (RMDs) that apply to those who reach age 72 is to take advantage of qualified charitable distributions (QCDs). You can direct distributions from your IRAs to qualified charitable organizations. The portion directed via a QCD is not subject to tax, boosting your tax savings. New laws implemented in 2023 allow individuals age 70-1/2 or older to make a one-time gift of up to $50,000 (adjusted annually for inflation) directly from an IRA to a charitable remainder unitrust, a charitable remainder annuity trust or a charitable gift annuity. The amount directed into such a trust or annuity would apply toward the $100,000 annual total QCD gift limit.


Tax considerations in the current environment

Recent changes in the interest rate environment may have an impact on your tax liability. If you invested in fixed income securities that pay high yields (including bonds and CDs), the income generated is taxed at ordinary income tax rates. Be aware of the potential impact as you file your 2023 tax return (in early 2024).

The income tax considerations related to fixed income securities may make it worthwhile to consider shifting some of those assets to long-term investments, such as equities, which may provide long-term tax advantages. If held for more than one year, the appreciated value is taxed at the more favorable capital gains tax rate. In addition, capital gains tax rates also apply to qualified dividend income (generally dividends paid by domestic companies) when specific holding period requirement are met.

Tax code changes occur every year, including adjustments to income tax brackets. Additionally, evolving market and economic dynamics make 2024 an opportune time to take a fresh look at your tax planning strategies.

Interest rates are part of the calculation when establishing charitable remainder trusts (CRTs). Today’s higher interest rate environment creates a potential tax advantage for those who establish CRTs, which are irrevocable trusts. You place assets into the trust, which can generate income for life or a term up to 20 years to the grantor or a beneficiary. At the end of that term, the remaining value goes to a qualified charitable organization. To determine the amount that qualifies for a charitable tax deduction, an assumed interest rate, the IRS’ so-called “7520 rate,” must be applied. In December 2023, that rate reached 5.8% (compared with a rate that dropped to 4.2% in June 2023).1 With a higher applicable rate, the charitable remainder value of the trust increases, which may allow the grantor to claim a larger tax deduction in the year making the gift.

The 7520 rate is also part of the calculation for GRATs, another form of irrevocable trust which is typically used by a grantor to transfer rapidly appreciating property (e.g. shares of stock). The 7520 rate is used to determine annuity payments back to the grantor and, conversely, a favorable 7520 rate may allow a grantor to transfer large amounts of money to a remainder beneficiary while paying little or no gift tax. Consider discussing these strategies with your financial and tax professionals.


Existing tax laws set to expire

In some cases, tax law changes are already built into the calendar. This is true with many of the provisions included in the Tax Cut and Jobs Act (TCJA) that passed in 2017. A number of the changes designed to be beneficial to taxpayers are scheduled to “sunset” (or no longer apply), by Dec. 31, 2025. As that date closes in, planning ahead is critical to leverage current, historically taxpayer friendly tax laws and to mitigate the potential impact of the changes that are scheduled to occur without further Congressional action. Here are some specific changes that will occur after 2025 unless Congress acts to amend their sunset status, and strategies to consider to offset these changes:


2023 tax bracket adjustments

Under current law, the top tax bracket for individual taxpayers, estates and trust income is 37%. It reverts to 39.6% after 2025. In addition, income thresholds that apply to the top tax bracket are likely to decline, putting certain high-income individuals at risk of greater tax liabilities if current tax laws expire as scheduled.

Other tax brackets will move higher after Dec. 31, 2025 as well, including:

  • The current 12% rate rising to 15%
  • The current 22% rate rising to 25%
  • The current 24% rate rising to 28%


Tax bracket strategies to consider

To the extent you are able, you may want to consider accelerating income into years prior to 2026 to take advantage of lower tax rates. You also will want to consider the potential benefits of maximizing pre-tax contributions to your retirement plan. In addition, if Roth IRA conversions are part of your long-term strategy, it may be advantageous to begin strategically executing those conversions as soon as possible in a strategic manner to capitalize on the current reduced tax brackets.


Alternative minimum tax (AMT) adjustments

Other provisions of the 2017 Act that could phase out after 2025 are exemption amounts that determine a taxpayer’s exposure to AMT. Under current law, AMT only affects several hundred thousand Americans. If current rules expire as scheduled, AMT could affect 6.7 million taxpayers in 2026.2


AMT strategies to consider

It may be particularly important for individuals with vested Incentive Stock Options that can be exercised to consider doing so before 2026. Be sure to connect with a tax professional to fully assess the tax complications.


Phaseout of qualified business income deduction

The TCJA allowed a 20% tax deduction on business income for S Corporations. If the provision expires as scheduled on Dec. 31, 2025, this deduction will no longer be available.


Business income deduction strategies to consider

Shareholders of S corporations may want to consider an election to a C corporation during the 2025 calendar year, as C corporations benefit from an existing top tax rate of 21%. That may be more favorable than what would be the applicable tax rate for an S corporation should the current tax deduction expire.


Unified gift and estate tax deduction cut dramatically

The unified estate and gift tax deduction is valued at $12.92 million per individual in 2023 and $13.61 million in 2024 (nearly $26 million for a married couple in 2023 and more than $27 million in 2024). Note that the exemption amount is rose significantly in 2023 and 2024 due to inflation adjustments. However, this exemption amount will be cut approximately in half, with a projected inflation-adjusted exemption of $6.8 million per person applicable in 2026 after the current tax law sunsets.

The ability to utilize certain lifetime gifting strategies will be limited, because of a reduced lifetime gift tax exemption beginning on Jan. 1, 2026, if not earlier. The same limitations apply to certain estate planning and wealth transfer strategies at death, because of a reduced estate tax exemption.


Gift and estate tax deduction strategies to consider

Individuals with large estates may want to capture the benefits of the current enhanced exemption levels by stepping up the pace of lifetime gifting. For example, the individual lifetime gift and estate tax exemption is scheduled to drop to approximately $6.8 million in 2026, barring Congressional action. An individual could gift up to $13.6 million prior to 2026. That may exhaust their exemption by 2026, but it will reduce the size of their estate and potential future estate tax liability significantly before more limited exemption levels apply. The IRS has made clear that utilizing the current enhanced gift and estate tax is permissible and will not have adverse consequences on taxpayers going forward, even if current laws sunset at the end of 2025. Also note that the opportunity to use this enhanced exemption may go away, so if it’s appropriate to, you’ll want to capitalize on it in the available, pre-2026 window.

In addition, business owners have an opportunity of gifting an ownership position as part of a lifetime gift. Depending on the structure of the business and the share of the business assets being passed on, “illiquidity” and “lack of control” discounts can apply to the valuation of business interests. For instance, assuming a 15% discount, if passing on $1.4 million of business assets as a gift, the lifetime gift tax exemption that needs to be claimed is much lower (approximately $1.2 million), reflecting the illiquidity discount. Note that the business valuation discount can vary. Leveraging business valuation discounts in conjunction with current higher exemption amounts can result in significant wealth preservation and transfer, if the actions occur prior to January 1, 2026.

Be sure to consider any current gifting strategy in the context of your broader financial plan. You want to be certain that large gifts you make now don’t preclude you from pursuing other prioritized goals.


New business entity reporting requirements effective in 2024

Under new federal legislation, the Corporate Transparency Act, most domestic and foreign businesses operating in the U.S. will be required to file specific owner & business information with the U.S. government. The intent of the new requirement is to detect, prevent, and punish money laundering, terrorism, and other business misconduct. The new rules apply to:

Any domestic reporting company that is a corporation, Limited Liability Company (LLC) or entity created by filing a document with a secretary of state or any similar office under the law of a state or American Indian Tribe.

Any foreign reporting company that is a corporation, formed under the law of a foreign country and registered to do business with a secretary of state or any similar office under the law of a state or American Indian Tribe.

Additional rules apply and certain corporations are exempt from the reporting requirement. Failure to report as required can lead to civil and criminal penalties. All existing entities must complete their initial filing with the Financial Crimes Enforcement Network (FinCEN) by Jan. 1, 2025. Newly created/registered entities established in 2024 must file their reports within 90 days of registration. These filings can be completed online through the FinCEN website, but it may be beneficial for entities with complex ownership structures seek the assistance of a tax professional or attorney.


Be prepared for new and potential tax law changes

While no new notable tax laws are on the horizon in 2024, changes could occur in the future based on the outcome of the 2024 November elections. There is also a high degree of certainty about the consequences if Congress does not act and provisions of the Tax Cut and Jobs Act (outlined above) expire at the end of 2025. Therefore, during the existing but narrowing window of opportunity for significant wealth preservation and transfer, it is important to consider current tax laws and related sunset provisions and plan accordingly. We, as always, closely monitor events in Washington and will keep you apprised of any potential changes to the tax code that could affect your tax liability.

Be sure to consult with your wealth professional, tax advisor and attorney to determine the most effective and appropriate tax planning strategies for you to meet your unique goals.

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  1. Source: Internal Revenue Service 

  2. Tax Policy Center, Urban Institute and Brookings Institution, “Briefing Book,” 2022.

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