In this Episode of the Secure Your Retirement Podcast, Radon and Murs discuss the latest provisions of the One Big Beautiful Bill and how these updates directly affect retirees and pre-retirees. Joined by tax expert Taylor Wolverton, CFP® and EA, they dive into key areas of the 2025 tax changes that could significantly impact your retirement planning strategies. From estate tax exemption levels to the nuances of the QBI deduction, these insights help you better understand how to navigate Taxes in Retirement while maximizing opportunities for long-term tax savings.

Listen in to learn about how provisions such as the new auto loan interest deduction, expanded charitable deduction, and the innovative Trump accounts for newborns can play a role in your personal retirement tax planning. With practical explanations and forward-looking strategies, this episode provides essential knowledge for anyone seeking to secure your retirement and prepare a thoughtful retirement checklist.

In this episode, find out:

·     Why the current tax rates are considered “permanent” and what that really means for your tax strategy for retirees.

·     How the estate tax exemption impacts your legacy and protects families from unnecessary gift and estate taxes.

·     What the Qualified Business Income (QBI deduction) means for self-employed individuals and small business owners.

·     The new charitable deduction opportunities even for those who take the standard deduction.

·     How auto loan interest deduction and Trump accounts for newborns could change the way families plan for the future.

Tweetable Quotes:

·     “There’s significant opportunity ahead of us to take advantage of today’s lower tax rates before changes come in the future.” – Radon Stancil

·     “Even small provisions in the One Big Beautiful Bill can create big opportunities for retirees who want to plan smartly.” – Murs Tariq

Resources:

If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!

To access the course, simply visit POMWealth.net/podcast.

Here’s the full transcript:

We hope you’ve

been enjoying all the episodes from Secure Your Retirement. If you’d like to keep

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receive alerts when they come out. We’ve helped thousands of listeners get on the

path to securing their retirement. Now it’s your turn, let’s dive in.

Welcome back to the Secure Your Retirement podcast and thanks for tuning in. I think

we’ve got a very exciting episode for you today. You know, Well, or maybe some

would say, it’s exciting, especially our special guest, Taylor Wolverton, who you may

know her voice at this point. You may know exactly what she does, which is

everything tax for our firm. Taylor is a certified financial planner, as well as an

EA, which is an enrolled agent. So very well-versed on individual tax,

as well as business tax, and helps our clients think through Tax strategy forward

-looking as well as what can we do this year to make our tax lives a little bit

better? So first off Taylor, thank you for hopping in with me today to talk a

little bit about tax Yeah, you’re welcome. I am excited. So yeah, I knew you should

be excited. You as a listener I don’t know that you may be all that excited to

talk about tax, but I think that topic today is rather important You know we

had the one big beautiful bill act that was passed a few months ago. And we’re

still uncovering and understanding all the different changes and what it means. And I

think we’re still going to continue to learn over the next year or so as far as how

this gets applied. But from the perspective of, you know, pre -retirement, in

-retirement, a lot of these changes do apply to you. We’ve done a couple episodes

prior to this one explaining some concepts that do apply to the individual.

And so, you definitely want to learn those and understand those, especially as we’re

going through the tax -repairing process come next year. But today we wanted to take

a few minutes to kind of walk you through some of the smaller provisions that I

think could get overlooked but are rather impactful and confirming some things for

you as well. So, Taylor, let’s just dive in. Let’s first let’s talk through a big

one, which is the tax rates and this word permanent that’s being thrown around. So,

what was our risk going to be if the bill didn’t pass and what do we get now?

– Right, yeah. So previously before the One Big Beautiful Bill Act, the tax rates

themselves were set to increase about 3 % for each one.

So, for example, the 12 % bracket was going to go up to 15%. The 22 % bracket was

going to go up to 25%. Every single tax bracket was going to increase.

So, we might have said this in a previous episode, but I just wanted to be clear.

A big part of this new bill is that the current tax rates, 10%,

12%, 22%, 24 % so on, are permanent. They are staying the same.

What It means, as far as tax law and Congress is using that word,

don’t know for sure. Of course, that could change in the future, I’m sure, but at

least as far as we know, for the foreseeable future, current tax rates are staying

the same. Yeah, I was doing a speaking event last night,

actually, and we brought up the permanency of the tax rates. And I said, who here

believes that permanent actually means permanent in the tax code and everyone raised,

I mean, no one raised their hands because it really just comes down to well, who’s

going to be next in office and what do they want to attack? So, what I think we

can say is, well, there’s I think significant opportunity ahead of us for the next

few years of the whatever this permanency is to take advantage of these lower tax

rates. So, I would keep that in in mind as you think through tax strategy. If you

don’t have tax strategy, you should have someone that’s helping you think through

these numbers because there’s a lot of opportunity right now. So that’s good.

Tax rates are staying at a bit of a discount for a period of time. Let’s talk

more now about estate tax and gift tax and help,

I guess, us understand first what a state tax is. that’s E -E -S -T -A -T -E,

by the way, not state tax, but estate. There’s a lot of times people get confused

around this, so let’s help people, listeners, understand what it is first before we

go into the changes here or the lack thereof changes. Yes, so after you pass away

all of your assets, those values are added up. Things like your home,

your investment accounts, your retirement accounts, other property that you have,

vehicles, jewelry, whatever other tangible assets, life insurance policies,

things like that are all, those values are all totaled. If the value of those

assets are greater than whatever the lifetime exemption amount is, which that dollar

amount is determined every single year. If your total assets are greater than that,

your estate has to pay tax on the amount greater than the exemption.

So, the current exemption amount has been made permanent along with the tax rates.

So, it’s set at $15 million per person if you’re a married couple that does double

to 30 million. But what it was previously before the big beautiful bill it was

going to be reset to about half of that amount we were expecting if the bill did

not go through that the estate tax exemption would be more like seven to eight

million so cut in half but that did not happen and so now the current estate tax

exemption which again is $15 million per person has also been made permanent so what

that means is after you pass way, if all of your assets are not greater than $15

million, you do not pay an estate tax. If it is greater than $15 million,

that is when you would need to start paying an estate tax, which, similar to

current income tax rates, is a progressive system. So, depending on how much your

assets exceed the exemption amount by, that determines what rate you pay. The top

top rate is 40%. So, it can be an expensive part of your estate and something to

keep in mind. But it is fortunate, at least with this bill, the higher exemption

rate has been also made permanent. Yeah, I think the big thing is that the $15

million is staying in place. So, for $15 million or $30 million for a couple, you

know, people are not going to be impacted by a state tax. But if you cut that in

half and now it’s seven per person or eight per person, you know, now you’re

throwing in people into potentially being affected and which requires a lot of

thorough estate planning and to, you know, avoid some of that taxation or think that

through. So, it’s nice that it’s a worry that most won’t have to have because it’s

staying in place. Okay, so let’s talk now about business and QBI,

which stands for Qualified Business Income. Help us understand what that is first and

then what’s going on with the One Big Beautiful Bill Act when it comes to QBI.

Yeah, so QBI applies when you have business income, so that could be self

-employment, sometimes even having rental income from real estate properties can count

towards QBI. If you have just you know other business income maybe you’re not like

technically self-employed but you have other business entities or structures set up

then that income obviously is reported on your tax return but then you’re allowed up

to a 20% deduction on that amount of qualified business income and there are

limitations around how that works and some income limitations. You may not qualify

for the full 21 % deduction itself, but what was previously slated to occur was that

QBI was going to be further limited or possibly even removed altogether, depending on

what Congress decided. And so that’s another piece of the big beautiful bill, just

to be aware of that QBI is here to stay for the foreseeable future. that’s also

been made quote -unquote permanent. So that will continue for those that are self

-employed or potentially have rental income, that that continues to reduce the amount

of tax that you are liable for on those types of income. – Nice, so another

positive deduction that is staying in place for anyone that’s self -employed or

running a business, so that’s good. Charitable giving, this is something that we talk

with clients all the time. And our opinion, by the way, to anyone listening is

really, you know, we could, I’ll say bluntly, we could care less whether you give

or not. But if you are giving, we want to make sure that we’re doing it in the

most tax effective manner, so that your wishes of giving are taken care of,

but as well, we get some benefits. And so traditionally, it’s been a little bit

hard to get those benefits on charitable giving. And there are some strategies

outside of The One Big Beautiful Bill that we’ve talked about all the time around

qualified charitable distributions and donor advice funds, but with the one big

beautiful bill, charitable giving has changed a little bit in a positive way, I

would say. So, Taylor, let’s walk through that one because I think everyone really

would want to know about this, even if they are taking the standard deduction.

Right. So historically, in order to it from a tax perspective.

From donating to charity, you have to itemize your deductions, which means you have

to add up all those expenses that qualify for itemized deductions that has to be

greater than the standard deduction. Otherwise, there really is no benefit coming

through to you for donating to charity as far as reducing your tax at your paying.

However, this new bill has reduced a change to that,

starting in 2026, where even if you take the standard deduction, now on top of the

standard deduction, you can qualify for an additional charitable deduction. If you’re

filing single, it’s another $1,000 deduction. If you’re filing jointly, it’s another

$2,000 deduction for charitable donations. That does have to be a cash donation so

it can’t be donating tangible items to goodwill or donating stock even will not

qualify for that. It does have to be a cash donation, but that is now on top of

the standard deduction, which is not typical and is a new change for 2026 going

forward. Yeah, I think that’s a nice one. It wasn’t available and now it is and

you don’t have to itemize to get access. I mean, that’s all good stuff. And You

know most are giving I would think somewhere around that and not getting any benefit

for it. So, It’s a nice addition Let’s talk about the Trump accounts

There’s been talk about them There’s a lot of Unknowing as to how they’re going to

work and how they operate, but it’s been this nice little promise of you know Being

able to fund these accounts and getting a nice benefit from them, too. So, I’ll

say this this is an evolving topic. Taylor, tell us what you know about

it so far. Obviously, realizing that next year, it may change or we’ll learn more

and we’ll have more details but take us through what you know so far. Yes. So

four children born from January 1st of 2025 through December 31st of 2028,

they’re eligible to open what right now is being called a Trump account, the

government will contribute $1,000 to those Trump accounts,

and then for other family members, parents, grandparents, whoever else,

if they also want to contribute on top of that $1,000 government seed money, then

that is allowed up to $5,000 per account per child each year.

So, I mean, at a minimum, if there’s a baby born between those years, get the

account open to get $1,000 of that seed money, and then if it benefits your

situation and you want to continue adding to that account, that is possible. It does

have to be invested in a fund that tracks the S&P 500, and no withdrawals are

allowed until the child that the account is in the name of, they have to be at

least 18 years old before any withdrawals can take place. So could be potentially

beneficial for those that are eligible. Yes, we are still waiting for more

information to come out on exactly how all those rules work and some of the

taxation is a little bit unclear when those withdrawals do take place? How does the

tax get paid on what dollars? And some of that’s a little bit fuzzy still. Also,

these accounts can’t even be opened until, at least after July of 2026.

So, it’s not something that can be started right away, but after July of 2026, even

for children born in 2025, those accounts can be opened. So yeah, at least something

to be aware of if you have a grandchild or a child born in those years. Yeah. And

I think as we get more clarity, we’ll probably provide that on this podcast down

the road in 2026, but because it is a nice little addition for a parent or a

grandparent to be able to set up a newborn, but there are specific rules.

So okay, I think there’s one other big one that we wanted to talk about, something

that has not been available before. And so, you, I actually learned a lot in this

pre -conversation that Taylor and I had about car loan interest and how that works

in the tax world. So, take us through that as far as what’s the new benefit here?

– Yeah, historically, car loan interest is not deductible. You don’t get any tax

benefit for having an auto loan period. But now, starting for the tax year 2025.

So, this could be reported on your 2025 tax return through 2028. There are some

certain requirements that need to be met, but it is a possibility to deduct your

auto loan interest. So, some of those requirements that it is important to be aware

of is first thing, it has to be a new car. So not use,

this does need to be a new car. And then the final assembly of the car does have

to take place in the United States. And then the deduction is allowed up to $10,000 in interest. And that deduction is available regardless of whether you itemize or

take the standard deduction on your tax return.

And there are some income limitations as well. The $10,000 deduction does start to

phase out. If you’re filing single, once your income exceeds $100,000,

the $10,000 amount is reduced. If you’re filing jointly, that income limit is $200,000. So, depending on your situation, you might not get the full benefit amount.

But still, if there is any amount you can deduct at all, that’s more than what has

been available historically. So, if the loan is through a credit union or whoever the

loan happens to be through, that custodian is who is supposed to issue a tax form

reporting that interest that might not happen for 2025, since it is a new provision.

So, if you’re preparing your own tax return, you might need to go look up your own

records to figure out how much auto loan interest you’ve paid this year, if you’re

otherwise, eligible, but going forward, that is how the reporting is supposed to work.

– Yeah, so I think that’s huge. I mean, when I was talking with Taylor, I said, so

this will just make it easier for someone to go into itemized deductions. And she

said, no, this is on top of the standard deduction. So that right there is power

in itself. If you have a new car and you’re paying interest, it is a tremendous, I

think, tax benefit there. But you got to know about it and you got to know how to

report it properly. So, this all kind of leads back into this idea of tax strategy

that, you know, we’ve taken our firm into this direction years ago and we’ve seen

tremendous benefit on our client side as far as I’m understanding their tax bill and

running tax strategies. And now in an environment that we’re in right now with tax

law change, Taylor’s able to kind of work through that and help people understand

and see what their new benefits are or potential new opportunities they have for tax

planning. So, if you’ve got questions, you know, or and you listen to this and

you’re like, my CPA doesn’t talk to me about these things, and you want to

understand what our program is all about. And when it comes to financial planning

and tax strategy, we are always happy to have that conversation. And so, the easiest

way to do that is hop over to the website, POMwealth.net. And from there, you’ll

be able to click on a link that will schedule a 15-minute phone call. You’ll speak

with one of our advisors and from there we’ll pretty much determine is there value

that we can add and we’ll show you how? And if not, we’ll give you guidance at

the very least and it always ends up being a very nice conversation. So, if you

wanted to do that, we’re always happy to have those conversations. But with that

said, Taylor, thank you so much for your time and thank you for doing this for

this podcast. It’s going to be very valuable to everyone out there. Yeah, of course.

All right, well, everyone have a great day. Thanks for tuning in and we’ll talk to you again next Monday.