Sellers CPA Tax Newsletter October & November Combined 2025 Edition
- Jonathan Freeman
- Oct 31
- 6 min read
Dear Valued Clients and Friends,
As we close out the final months of 2025, the tax landscape continues to evolve rapidly under the influence of the newly enacted "One Big Beautiful Bill Act" (OBBBA), signed into law on July 4, 2025, and a series of executive actions from the Trump Administration. At Sellers CPA, we remain committed to helping you navigate these changes with clarity and precision. This edition provides an in-depth overview of key tax law updates, executive orders with tax implications, and critical shifts in banking and financial markets that could influence your year-end planning. Our goal is to equip you with actionable insights—remember, these developments underscore the importance of personalized strategies tailored to your unique financial situation.For a comprehensive review of how these changes may affect you, we encourage you to contact Sellers CPA to schedule a consultation.Key Updates and Changes in Tax LawThe OBBBA represents the most sweeping tax reform since the 2017 Tax Cuts and Jobs Act (TCJA), making many of its temporary provisions permanent while introducing new incentives and adjustments. Effective for tax year 2025 (returns filed in 2026), these changes aim to stimulate economic growth but also introduce complexities for compliance and planning. Below, we outline the most significant updates:
Permanent Extension of TCJA Provisions
Individual Income Tax Rates and Brackets: The TCJA's seven-bracket structure (10%, 12%, 22%, 24%, 32%, 35%, and 37%) is now permanent. Inflation adjustments for 2025 increased brackets by an average of 2.8%, with the top 37% rate applying to taxable income over $609,350 for singles and $731,200 for married filing jointly. This provides long-term certainty but limits the phase-out of lower rates post-2025.
Standard Deduction: Enhanced to $15,750 for singles and $31,500 for married filing jointly in 2025, up from prior projections of $15,000 and $30,000, respectively. An additional temporary boost of $1,000 ($2,000 for joint filers) applies through 2028.
Child Tax Credit (CTC): Increased to $2,000 per qualifying child (up to $1,700 refundable), with phaseouts starting at $200,000 ($400,000 joint). Social Security numbers are now required for all claimants, tightening eligibility.
Qualified Business Income (QBI) Deduction: The 20% deduction for pass-through entities is extended permanently and expanded to 23% for eligible income, benefiting small businesses and self-employed individuals.
New Deductions and Credits
Senior Deduction: A new above-the-line deduction of up to $6,000 for individuals aged 65 and older, effective 2025–2028, phases out at $75,000 AGI ($150,000 joint). This stacks with the existing additional standard deduction and could reduce taxable income significantly for retirees.
Auto Loan Interest Deduction: Up to $10,000 in interest on qualified loans for U.S.-assembled vehicles purchased after January 1, 2025, is now deductible as an above-the-line expense. This targets personal-use vehicles and incentivizes domestic manufacturing.
Tips and Overtime Deduction: A temporary deduction for tips and overtime pay received in 2025–2028, aimed at service and hourly workers, with income limits to be detailed in forthcoming IRS guidance.
Trump Accounts: A new tax-exempt savings vehicle for children born 2025–2029, seeded with a $1,000 government contribution. Funds can be used tax-free for higher education, small business startups, or first-time home purchases, promoting intergenerational wealth building.
Estate, Gift, and Business Provisions
Estate and Gift Tax Exemption: Permanently raised to $15 million per individual ($30 million per couple), indexed from 2025, shielding more assets from the 40% estate tax.
Bonus Depreciation: Reinstated at 100% for qualified property (e.g., machinery, equipment, aircraft) placed in service after January 19, 2025, through 2029. This accelerates deductions for capital investments, spurring business spending.
Clean Energy Credits: Modifications to sections 25C–179D extend and adjust incentives for energy-efficient homes and commercial buildings, with new rules on construction start dates tied to executive guidance.
These enhancements reduce tax burdens for many but phase out for higher earners, emphasizing the need for income projection modeling. Note: Personal exemptions remain eliminated, and itemized deductions for top-bracket taxpayers are capped at 35 cents on the dollar.Executive Orders from the Trump AdministrationSince January 20, 2025, President Trump has issued over two dozen executive orders (EOs), several with direct tax ripple effects. These actions prioritize deregulation and "America First" policies, often bypassing
Congress for swift implementation:
EO on OECD Global Tax Deal (January 20, 2025): Declares U.S. commitments to the OECD's Pillar 1 and 2 frameworks (reallocating taxing rights and imposing a 15% global minimum tax) as having "no force or effect" without congressional approval. Directs Treasury to identify "discriminatory or extraterritorial" foreign taxes and propose retaliatory measures, such as rate hikes on foreign investors under IRC Section 891. This shields U.S. multinationals from foreign levies but risks trade tensions and double taxation disputes.
Regulatory Freeze and OIRA Review (January 20, 2025): Halts new IRS/Treasury regulations for 60–90 days, reinstating Office of Information and Regulatory Affairs (OIRA) oversight for significant rules (e.g., those with $100M+ impact). This delays finalization of corporate AMT and basis-shifting regs, providing breathing room but uncertainty for compliance.
IRS Hiring Freeze (January 20, 2025): Indefinite pause on IRS hiring (except enforcement roles), aiming to curb "weaponization" and reduce audits on middle-class filers. Paired with a workforce reduction plan, this could slow processing and guidance issuance, heightening refund delays and errors.
America First Trade Policy (January 20, 2025): Mandates tariffs on imports (e.g., 10–25% on China, Canada, Mexico) to counter "unfair" taxes like VATs. Senate voted 50–46 to terminate some (October 29, 2025), but veto threats persist. Tariffs act as de facto taxes, raising costs for importers and consumers.
Electronic Payments Mandate (March 25, 2025): Phases out paper checks for refunds and benefits by September 30, 2025, to combat fraud. Impacts tax refunds and Social Security, requiring direct deposit setup.
These EOs signal a deregulatory push but introduce volatility—e.g., tariff challenges could trigger Section 301 retaliations, affecting supply chains.
Banking and Markets Shifts:
Implications for Tax Planning
October's markets reflected policy uncertainty: The S&P 500 dipped amid hawkish Fed signals (no December cut "inevitable") and Meta's $5B+ tax charge under OBBBA repatriation rules. Broader trends include elevated stability risks from stretched valuations and fiscal deficits, per IMF's October report. Key shifts and tax angles:
Interest Rates and Borrowing: Fed's 4.25–4.5% range persists into 2025, with slower cuts expected. Higher rates inflate debt costs, but OBBBA's auto loan deduction eases personal financing. Businesses: Leverage 100% bonus depreciation for equipment amid rising capex.
Tariffs as Tax Drag: Imposed tariffs (e.g., 25% on Canada/Mexico) squeeze margins, acting like a 1–2% GDP tax hike. Multinationals: OECD EO may offset via retaliatory credits, but model supply-chain shifts for transfer pricing.
Private Credit and NBFIs Boom: Nonbank lending surges (projected $2T+ in 2025), but IMF warns of spillovers to banks via interconnections. Tax note: Carried interest reform threats could end preferential rates for PE/hedge funds, prompting offshore reviews.
State-Level Impacts: California's single-sales-factor apportionment for banks (effective 2025) boosts revenue by $330M but hikes liabilities for in-state firms—project $250M annual increases.
Asset Valuations: Equity/bond overstretch risks corrections; munis offer tax-free yields (federal-exempt) for high-tax states. Real estate: Tariffs inflate construction costs, but bonus depreciation aids developers.
These dynamics favor fee-based banking models and M&A activity, but volatility demands stress-testing portfolios.
Year-End Action Items
Harvest Losses/Gains: Offset capital gains with losses; consider Roth conversions before potential 2026 bracket hikes.
Maximize Deductions: Bundle charitable gifts; fund Trump Accounts for newborns.
Business Owners: Time QBI-eligible expenses; elect bonus depreciation.
Retirees: Model senior deduction against Social Security taxation.
The interplay of OBBBA, EOs, and market forces creates both opportunities and pitfalls.
Proactive planning now can optimize your 2025 outcomes.
Contact Sellers CPA today to set up a consultation and ensure your strategy aligns with these developments. We're here to support your financial success.
Best regards,
Carol Sellers. C.P.A. &
The Sellers CPA Team
Disclaimer:
Sellers CPA is not a registered investment adviser, broker-dealer, or financial planner. The information contained in this newsletter is for general educational and informational purposes only and does not constitute tax, legal, investment, or financial advice. Tax laws are complex and subject to change; the application of any law or regulation depends on individual circumstances. Readers should not act upon the information provided without seeking professional advice from a qualified tax advisor, attorney, or financial professional. Sellers CPA makes no representations or warranties as to the accuracy, completeness, or suitability of this information for any purpose. Past performance is not indicative of future results. All investments involve risk, and you may incur a profit or loss regardless of strategy selected. Contact Sellers CPA to schedule a personalized consultation to discuss your specific situation.
