Sellers CPA December 2025 Tax Newsletter Update

Will the nation get a huge gift from Trump and Congress? Will Santa eliminate the income tax and let you keep the money you earn? Read this months update for answers.

Dear Valued Clients,

As we gather with family and friends this December, I’m Carol Sellers, founder and owner of Sellers CPA, sending you this detailed Tax Newsletter with gratitude for another year of partnership. 2025 has delivered meaningful tax relief through the One Big Beautiful Bill (OBBB), strategic executive actions that are strengthening America’s economic position, and an exciting conversation started by President Trump about the long-term possibility of moving away from the federal income tax and funding government primarily through tariffs.

In this edition, you’ll find practical year-end planning ideas, a clear summary of the new law, an explanation of how recent executive orders may affect your 2026 taxes, and the context behind the President’s recent comments on income-tax elimination.

Year-End Tax Planning Checklist – Act Before December 31, 2025Many OBBB provisions are already in effect for 2025 returns, and others begin January 1, 2026. Here are the most valuable moves still available this year:

• Maximize retirement contributions (401(k) $23,500; IRA $7,000 + catch-up amounts)

• Harvest capital losses or realize gains in the 0% bracket (under $47,025 single)

• Make 2025 charitable gifts (non-itemizers can still deduct $1,000/$2,000 above-the-line)

• Bunch itemized deductions to take advantage of the temporary $40,000 SALT cap

• Claim the new $6,000 extra standard deduction if age 65+

• Exclude up to $25,000 of tip income or $12,500 of overtime (phases out at $150,000 MAGI)

• Install qualifying solar or battery storage by 12/31/2025 for the 30% credit (phases out after 2025)

• Purchase a qualifying U.S.-assembled vehicle and deduct up to $10,000 of loan interest

Contact us for a quick projection—we can often find thousands in additional savings.

The One Big Beautiful Bill – Permanent Tax Relief for 2026 and Beyond

Signed July 4, 2025, the OBBB makes most of the 2017 TCJA provisions permanent and adds several family- and worker-friendly enhancements. Key highlights:

Provision	2025 Amount	2026 Amount (inflation-adjusted)	Notes
Standard Deduction (Single)	$15,750	$16,100	Permanent
Standard Deduction (MFJ)	$31,500	$32,200	Permanent
Top 37% bracket starts (Single)	$626,350	≈$640,600	Permanent seven-bracket structure
Child Tax Credit	$2,200 ($1,700 refundable)	$2,000 ($1,700 refundable)	Permanent, indexed after 2026
QBI 20% deduction	Permanent	Permanent	Phase-out thresholds rise with inflation
SALT deduction cap	$40,000 (2025–2029)	$40,000 (through 2029)	Reverts to $10,000 in 2030
Estate/gift tax exemption	$13.99 million	$15 million (indexed)	Doubled permanently

The IRS released 2026 inflation adjustments on October 9, 2025 (Rev. Proc. 2025-32). Most families will see lower effective rates in 2026 than they would have without this legislation.

Executive Orders That May Affect Your 2026 Taxes

President Trump has used executive authority to implement several trade and revenue measures. The most relevant for taxpayers are the new tariff schedules:

• Beginning in 2025 and expanding in 2026, tariffs of 10–60% apply to many imported goods (highest on China, lower reciprocal rates on other countries).

• Tariff revenue reached $195 billion in FY2025 and is projected to exceed $300 billion in FY2026.

• Businesses can deduct import tariffs as an ordinary business expense, which often offsets much of the cost increase for importers.

• The administration has stated that a portion of this revenue will be used to reduce individual income-tax liability in future years.

Additional orders paused certain Inflation Reduction Act spending and withdrew from the OECD global minimum-tax agreement, preserving favorable U.S. international tax rates for multinational companies.

President Trump’s Recent Comments on Eliminating the Income Tax

On November 27, 2025, President Trump told U.S. service members that surging tariff revenue could allow the country to “substantially reduce or maybe even eliminate” the federal income tax over the next several years. He noted that before 1913, the federal government was funded almost entirely by tariffs and excise taxes. Watch the President's statements:

Video Source: Reuters While complete elimination would require congressional action and significant spending restraint, the administration is actively exploring phased reductions—potentially starting with full relief for households under $150,000 and expanding from there—using tariff revenue as the funding source. For planning purposes, we recommend continuing to assume the current income-tax system remains in place for 2026, but we will keep you updated as details emerge. As always, our team is ready to review your specific situation—just give us a call to schedule a consultation.

Wishing you and your loved ones a very Merry Christmas and a peaceful, prosperous holiday season. Thank you for trusting Sellers CPA with your tax needs—we truly appreciate you.

Warmest regards,

Carol Sellers, CPA and the entire Sellers CPA team