The 2025 tax cuts are not just changes; they are transformations that will impact your estate tax, standard deduction, and tax planning strategies. Join hosts Jeb, Ethan, and Eric on the Metcalf Money Moment podcast as they unpack the One Big Beautiful Bill Act (OBBBA), signed into law in 2025. This episode delves into critical updates, including higher estate tax exemptions for the ultra-wealthy, expanded standard deductions for retirees, and new deductions for business owners. Discover how 2025 tax reform estate planning can optimize your financial future, whether you're saving for retirement, managing a business, or planning your legacy. Tune in for expert insights to maximize your wealth with these tax cuts.

What you will Learn in this Episode:

How tax cuts impact your tax planning and financial strategies.

Changes to estate tax exemptions and their effect on wealth transfer.

Benefits of increased standard deduction for retirees and families.

New qualified business income deductions for business owners.

Strategies for 2025 tax reform estate planning to optimize savings.

Tune into the Metcalf Money Moment podcast for expert insights on wealth management and retirement planning! Join Jeb, Ethan, and Eric for practical Estate Planning strategies that you can implement to unlock financial clarity and confidence. Listen now to inspire your financial journey!

TIMESTAMPS:  

01:25 Overview of 2025 tax cuts in One Big Beautiful Bill Act: Impacts on tax planning, revenue reduction

04:40 Estate tax updates: Exemption rises to $15M/person, aiding wealth transfer for high-net-worth

07:21 SALT deduction changes: Increases to $40K for married couples, phases out above $500K income

10:31 Standard deduction at $31,500, no tax on tips/overtime or car loan interest

15:02 Retiree benefits: Senior deduction adds $6K/person, qualified business income deduction permanent

21:30 Tax planning opportunities: Roth conversions, estate tax strategies for efficient wealth transfer

KEY TAKEAWAYS:  

Tax cuts impact: The One Big Beautiful Bill Act reshapes tax planning, estate tax, and federal revenue.

SALT deduction expansion: $40K cap for married couples, key for tax cuts and high earners’ tax planning.

New deductions: Car loan interest, charitable contributions, enhance tax cuts, support retirement planning.

Senior deduction: $6K extra for those 65+, a significant tax cut boost for retirement planning strategies.

ABOUT THE HOSTS: 

Jeb Graham, the CEO and Managing Partner at Metcalf Partners Wealth Management, is a seasoned financial advisor with a CFP® designation and executive education in retirement planning from Wharton. His expertise and community involvement make him a trusted voice in the field. Before founding Metcalf Partners, Jeb was a financial advisor in Overland Park, Kansas. Active in the Kansas City community, Jeb serves on the Kansas City Chapter Board of the Entrepreneur Organization (EO). He holds a finance degree from Kansas State University and a CFP® designation, and he received additional executive education in retirement planning from Wharton.

Ethan Hutcheson is a Partner and Financial Planner at Metcalf Partners. He is passionate about helping people prepare, plan, and execute their goals. With a career in Financial Services, his expertise spans Financial Planning, Tax, and Investment Management. Outside of work, Ethan enjoys hunting, cycling, and outdoor activities with his wife, Shanna, and their sons, Rhett and Levi.

Eric Wymore is a Partner and Wealth Manager at Metcalf Partners Wealth Management. His career has been dedicated to wealth management. As an Accredited Investment Fiduciary, he prioritizes acting in clients’ best interests. Originally from southeast Iowa, Eric has lived in Kansas City for 20 years with his wife, Becky, and their sons, Gabe and Nolan. He holds a degree in finance from Iowa State University.

DISCLAIMER:

This information is not intended to be a substitute for specific individualized tax or legal advice. We recommend discussing your particular situation with a qualified tax or legal advisor.

RESOURCES MENTIONED: 

Metcalf Partners - Website

Jeb Graham - LinkedIn

Ethan Hutchison - LinkedIn

Eric Wymore - LinkedIn

Now, your host.[00:00:30]

Moving into fall. Um, exciting year so far. The Chief's, you know, you guys [00:01:00] been watching Chief's game. I've been watching Chief's game. I'm hoping by the time our listeners. Get to get to listen to this, that the chiefs have won two games and that they're two and two's, but We'll, right. We'll see how that transpires.

Right? Yeah. So I'm

Jeb Graham: mean, two more hard games, right. So, that's right. Anyway, so we'll get to, instead of being a sports podcast, we'll get to what we actually talk about, which is, which is money. Uh, and we're gonna talk about today's topic, uh, which, you know, this bill actually came out.

Taxes. It's covering retirement, it's covering business, it's covering estate, it's covering deductions, credits, and a lot more. So [00:02:00] there's a ton of stuff in this bill. It is very, very big. Um, you know, whether it's beautiful that's, uh, that's in the eye of the beholder, right? And so, uh, what, what I will say is that it was passed by a razor thin margin.

And what I will say, and this is just my own take there, is that I think part of what this administration was trying to do is lower, lower the income tax [00:02:45] burden of. Citizens of this country that are the taxpayers and hoping that they're gonna produce additional revenues in other ways through, you know, what they're calling the external revenue service, uh, where they're, they're bringing in tariffs and, and increasing revenue in that way.

Ethan Hutcheson: Yes. Very, very important for our listeners and it, it impacts. Virtually everyone, whether you're, you're working, whether you're retired, um, on disability, anything you, you're, you're gonna be impacted in, in some way or another. Um, so if [00:03:30] you're, if you're working, um, there's gonna be, your paycheck's gonna look a bit little bit different.

And then retirement rules have shifted. There's a lot of, um, updates to deductions and, and all of that. And we'll kind of get into how we can implement those and [00:04:00] how those impact you. Um, as someone who is saving for retirement or if you're already retired, what does that mean and, and how we can, how can we take advantage of some of these new laws?

And we're gonna kick it off, you know, [00:04:30] just by talking a little bit about some of the, the estate and the wealth transfer, uh, and the updates on that, on the tax or on the, the new bill.

And, uh, those are two different things, but we're gonna talk about the estate tax. Okay. What that is, how it works. And then also the salt deduction, which is the state and local tax deduction [00:05:00] and how that's changing this bill for number one, let's start on the estate tax and I, where I wanna start at is what is the estate tax?

If a traditional IRA or a 401k [00:05:30] is passed down to errors. But as far as the estate tax, it really affects very limited people. Um, but I do want to kind of go over how that's changed a little bit. Uh, in the estate tax number one is it, like I said, [00:05:45] it only applies to very few people, but the people that do pay it, it's a very hefty tax, right?

Okay. Meaning they [00:06:15] thought that maybe it was gonna lower to seven or 6 million or something like that. And what that would mean is any individual that died that had over a $7 million state had to pay a state taxes. Well, this bill actually reversed that, and the exemption went up. So in 2026. The new exemption is [00:06:30] $15 million per person.

Is subject to estate taxes and [00:07:00] you pay 40%. Tax liability on anything that's over that. So that's a big deal. So that's one of those, uh, rules here where it's kinda like it's, it's easier for people to pass down money. The ultra wealthy are having to pay less money [00:07:15] on the, uh, on their estate if, if they pass away.

Uh, in 2024, that figure was $10,000 is what you got to deduct. Well, the new rule here, [00:07:45] and this is an additional deduction on top of what Eric's gonna cover here in a little bit of just the standard deduction going up, but this, uh, going forward, uh, you get to from, from the years 20. 25 to 2029 and then it sunsets, uh, the [00:08:00] cap is a $40,000 for married filing jointly, or $20,000 for married filing, single or separately or single people.

Then you only pay, you only get to deduct $10,000 of state and local taxes. But that is a big deduction for a lot of people. That's, that will change. I would say specifically the people [00:08:45] that make say between 200,000, $500,000, that's gonna be because the people that that are there also probably pay pretty high state and local taxes.

[00:09:15] Tax relief and, and how this is affecting the everyday, uh, individual in America as well.

Jeb Graham: states. Yep.

Ethan Hutcheson: And the, you know, previously they were gonna lower that to what, six or 7 million?

Ethan Hutcheson: And I think we can all speak, you know, just in our business and just people we know, we know a lot more people with $2 million or $7 million than we do.

Jeb Graham: So, so, and there's very little of our client base that, I mean, there's just not that many 0.2% of the population's a pretty, there's just not that many of 'em out there.

Ethan Hutcheson: [00:10:30] Um, yeah, so, so I'm here to talk about, uh, families and everyday tax relief.

Uh, as of this bill. Um, how that kind of [00:11:00] trickles down into your life or people that are probably listening to this podcast. So the, the standard deduction now for a married couple filing jointly is $31,500. So put that into, [00:11:15] to, to, to real life example. If you're a joint income household making a hundred thousand dollars, your modified adjusted gross income goes down to $68,500.

So if you make. $500,000 a year, and you get tips on top of that, you're, you're, you're still gonna probably have to pay taxes on that. But if you are working [00:12:00] for, um, you know, Chili's or, uh, a restaurant or whatever it is, and most of your income comes from taxes, or sorry, comes from, um, from tips, there's a, a high likelihood that you're gonna be able to, uh, deduct.

It does have to be used for personal uses. You cannot buy a fleet of trucks if you're a landscape company and deduct the interest on those. So it does have to be a personal vehicle, [00:12:45] and most importantly, the final assembly of that vehicle has to be made in the United States of America. Um, there's a lot of online tools where you can type in your VIN to see if this particular car qualifies for, uh, deducting that car loan interest.

Um, goes a long ways, especially when, when everything's so much more expensive than it used to be. Um, one thing that's really cool is charitable contributions. Even if you don't itemize, those can now be deducted up to $2,000. [00:13:30] So in my previous example, if you make five or make a hundred thousand dollars a year and you file for the standard deduction of 31,500, you're taxed at $68,500 of income if you donate $2,000 to charity.

Now you can take the standard deductions since it's so high. And still get a little bit of a deduction for some of the, uh, charitable contributions you're making. So, um, I I think it's a, it's a really unique, unique bill because there are a lot of [00:14:15] tax breaks for the ultra wealthy and things of that nature as well.

Eric Wymore: For sure.

So. A couple of more things that I'm [00:15:00] gonna discuss, um, is a little bit about like a retiree right now. And one of the things that, Ethan, as you mentioned, you have a standard deduction that's $31,500. Then if you are 65 years or older, uh, [00:15:15] you get an additional $1,600, uh, per qualifying individual. So if you're married, filing jointly, your standard deduction gets increased by $3,200.

Now, couple of things. It depends, right? It depends on [00:16:00] if your income is, your modified adjusted income is lower than $150,000, which for a lot of individuals is. They do qualify for that. Um, it phases out between 150 and one 60. [00:16:15] Uh, but if your income is lower than a hundred, $150,000, you do qualify for this and you're 65 or older, you do qualify for the senior deduction of an additional $6,000 per person.

Jeb Graham: which

Eric Wymore: is quite a bit more than I

That, that, that doesn't apply to everybody. But I mean, there's a lot of people that that's, that is a huge chunk of their income that is not taxable. I mean, this is half or more.

This is the part of the bill that if you are 50 or 55 years old and you're prep, [00:17:15] preparing for retirement, you need to do some things in place to be able to take advantage of this. And if you're 65 years old and, and, or you know, between 65 and 72 or three before required minimum distributions, you definitely need to be taken advantage of [00:17:30] this.

Second part of the, the, the bill that we're gonna talk, I'm gonna mention is, is the qualified business income deduction. So this [00:18:00] was from actually in the 2017 tax bill. Basically, if you have an income from a pass through entity such as an S corp, an LLCA, a sole proprietorship, or a partnership, [00:18:15] you can deduct up to 20% of that qualified business income.

Well, one, the, it was [00:18:45] only temporary, so now it's permanent. It was temporary in the 2017 tax bill. Now it's a permanent clause. It also has increased, uh, the number of participants. So before there was some exemptions, but right now, uh, they opened the doors [00:19:00] for law law firms. Uh, medical practices, uh, financial service practices, accountants, consultants, uh, are now eligible to have that qualified business income deduction.

Now it's become permanent. Um, also kind of consider if you're a retiree. You can do retire or you can do rental income if you've got a rental income, that's, that can be something that qualifies for the QBI. [00:19:45] Uh, so kind of a, a, you know, a unique part of the bill. Um, the last thing that I'm gonna talk about is you have this bonus appreciate, or excuse me, bonus depreciation that's extended for, for, for business [00:20:00] owners.

So when you're looking at your cash flow as a business, and let's say you're having a banner [00:20:30] year and it's a unique year. Um, maybe you wanna purchase something. Some kind of an equipment, uh, right away. And rather than having that depreciate over a set number of years, like in the normal schedule, you [00:20:45] utilize this upfront, uh, acceleration for the depreciation and you get to write off a larger amount of taxes, uh, or of that expense.

But [00:21:15] again, if you had a banner year and you need to deduct your tax bill, that's something that you can utilize. Yep.

That's the prime time for a lot of retirees ba [00:21:45] depending upon what their asset mix and stuff like that is, but where we can get a lot of money out of their. Traditional IRA or traditional 401k at a low cost, right? And now that we have this additional layer of standard deduction that makes it even [00:22:00] more feasible that more and more of our clients are going to be in that 12% or 22% tax bracket, which we would consider kind of prime, the prime candidates to really look at either a Roth conversion or just taking money out of their non, out of their IRA and putting it [00:22:15] into their non-retirement account and just trying to get it outta there at the lowest.

So somebody's gonna inherit money when they're already making more than they've ever made in their [00:22:45] life, and now they're layering extra pieces of it at a high tax bracket. Whereas if we can do the planning now, uh, it can be kind of a generational type thing, right? Where we're, where we're helping people not only save money in their own lifetime, but hopefully, uh, make their estate a little bit more efficient.[00:23:00]

So Absolutely, absolutely. Focus on things we can utilize,

So, um, you know, be open with us, share your tax return, have those conversations, and, and that's where we, we will, we will really put the pen to paper on some of these, some of these new [00:23:45] items in, in this.

Jeb Graham: Yeah. And good news is with holistic plan, which is what we do our tax planning with to, to Ethan's point, we aren't CPAs and we aren't tax advisors, but we do do tax planning with clients through software.

Eric Wymore: that, that's a good point.

All of those plans are going to be updated automatically and, and, and, you know, it, it could be for a lot of clients, a, a much. Rosie your picture. Yeah. Just because their tax, their tax law, their tax bracket's going to be lower than, [00:24:45] you know, going forward than what it was going to be in 2026 and beyond.

And, uh, hopefully we can have more conversations as we, as we meet with people. So, uh, guys, it's been real, [00:25:15] been a good, good, uh, good session here and this is Metcalf Money Moments signing off.

Disclaimer: Jeb Graham, Ethan Hutchinson and Eric Wymore are registered representatives with and securities offered through LPL Financial Member FINRA SI PC Investment advice offered through W CG Wealth Advisors, a registered investment advisor, W CG Wealth Advisors [00:26:00] and Metcalf Partners Wealth Management is AR separate entity entities from LPL Financial.

The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual to determine which strategies or investments may be suitable for you. Consult the appropriate qualified professional prior to making a decision.