The ‘Eide Bailly Tax Planning Guide 2025-2026’ provides comprehensive strategies for higher-income taxpayers to optimize their tax liabilities. This guide covers key topics such as income and deductions, executive compensation, investing, real estate, and retirement planning. Published by Eide Bailly, it serves as an essential resource for navigating the complexities of tax law.
Tax Planning Guide
2025 | 2026
Year-round strategies to make the tax laws work for you.
2025 brings more tax
planning certainty for
higher-income taxpayers
O
n July 4, the legislation commonly known as the One Big Beautiful Bill Act (OBBBA) was signed into law. It makes perma-
nent many provisions of the Tax Cuts and Jobs Act (TCJA) that help reduce tax liability and had been scheduled to expire
Dec. 31, 2025, such as lower individual tax rates and higher gift and estate tax exemptions. But it also makes permanent the
reduction or elimination of certain breaks that had been scheduled to resume after 2025.
That’s not all: The OBBBA introduces some new tax breaks (though many are subject to income-based phaseouts that will reduce
or eliminate the benefit for higher-income taxpayers) and enhances some existing breaks. However, it terminates many tax breaks
related to clean energy.
Minimizing taxes is a critical challenge for higher-income taxpayers subject to higher tax rates and certain additional taxes,
as well as to tax-break phaseouts. To meet this challenge, you need to know how the OBBBA will affect your specific situation.
Then you need to closely monitor your income as the year progresses and be aware of all of the tax breaks for which you
are, in fact, eligible. Finally, you have to implement strategies that allow you to take maximum advantage of the tax savings
opportunities available to you while staying in compliance with tax law.
This guide provides an overview of some of the key tax provisions higher-income taxpayers need to be aware of. It offers a variety
of strategies for minimizing your taxes in the current tax environment. Use it to identify the best ones for your particular situation
with your tax advisor, who also can keep you apprised of any new tax law developments that might affect you.
Contents
Income & Deductions 2
Executive Compensation 6
Investing 8
Real Estate 12
Business Ownership 14
Charitable Giving 16
Family & Education 18
Retirement 20
Estate Planning 22
Tax Rates 24
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The latest tax provisions
may affect your timing
strategies and more
Income & Deductions
2
T
he OBBBA makes permanent certain
TCJA changes to tax deductions and
the alternative minimum tax (AMT), as well
as making other changes to them. Some of
these OBBBA provisions will be beneficial
to many higher-income taxpayers, while
others generally won’t be. To maximize
your tax savings, familiarize yourself with
the OBBBA provisions that affect you as
well as tried-and-true strategies for reducing
taxes, such as timing income, deductible
expenses and more to your tax advantage.
Timing income and expenses
Smart timing of income and expenses can
reduce your tax liability, and poor timing
can unnecessarily increase it. When you
don’t expect to be subject to the AMT (see
page 4) in the current year or the next year,
deferring income to the next year and accel-
erating deductible expenses into the current
year may be a good idea. Why? Because it
will defer tax, which usually is beneficial.
But when you expect to be in a higher tax
bracket next year — or you believe tax
rates may rise — the opposite approach
may be beneficial: Accelerating income
will allow more income to be taxed at your
current year’s lower rate. And deferring
expenses will make the deductions more
valuable because deductions save more tax
when you’re subject to a higher tax rate.
Whatever the reason behind your desire to
time income and expenses, you may be able
to control the timing of these income items:
◗ Bonuses,
◗ Self-employment income,
◗ U.S. Treasury bill income, and
◗ Retirement plan distributions, to the
extent they won’t be subject to early-
withdrawal penalties and aren’t
required. (See page 21.)
Some expenses with potentially controllable
timing are property tax (see “Increased
deduction for SALT” below), investment
interest expense (see Case Study 5 on
page 11), mortgage interest (see page 12)
and charitable contributions (see page 16).
The OBBBA impact
on timing strategies
Timing income and deductions was more
challenging under the TCJA because some
strategies that taxpayers used to implement
no longer made sense. The OBBBA makes
most of those changes permanent, but it
includes at least one change that might
make timing strategies more viable again
for certain taxpayers. Here’s a look at some
significant changes that affect deductions:
Increased deduction for SALT. Property
tax used to be a popular expense to time.
But with the TCJA’s $10,000 limit on the
state and local tax deduction, property tax
timing has provided little, if any, benefit for
higher-income taxpayers in recent years. This
might change for some taxpayers beginning
this year. (See “What’s new!” below.)
If you reside in a state with no, or low,
income tax, the SALT limit might be less
relevant. But keep in mind that deducting
sales tax instead of income tax may be
beneficial, especially if you purchased a
major item, such as a luxury car or boat.
Elimination of most miscellaneous
itemized deductions. The OBBBA makes
permanent the TCJA’s suspension of miscel-
laneous itemized deductions that had been
subject to the 2% of adjusted gross income
(AGI) floor. Examples include certain
professional fees, investment expenses and
unreimbursed employee business expenses.
Under the TCJA, your entire itemized deduction for
state and local taxes — including property tax and the
greater of income or sales tax — has been limited to
$10,000 ($5,000 for married couples filing separately).
Beginning in 2025, the OBBBA increases the SALT
deduction limit to $40,000 ($20,000 for separate filers).
However, when modified adjusted gross income (MAGI)
exceeds $500,000 ($250,000 for separate filers), the cap
is reduced by 30% of the amount by which MAGI exceeds the threshold — but
not below $10,000 ($5,000 for separate filers).
This boosted SALT cap will be a significant tax saver for many higher-income
taxpayers in high-tax states. For example, a single taxpayer with $40,000 in SALT
expenses who’s in the 35% tax bracket but whose income isn’t high enough to be
subject to the 30% reduction could save an additional $10,500 in taxes.
Taxpayers with less than $40,000 in SALT expenses and with income below the
reduction threshold might be able to further reduce their 2025 tax liability by
prepaying their 2026 property tax bill (if the tax has been assessed) in 2025.
Both the SALT cap and the threshold will increase 1% annually through 2029.
However, without further legislation, the $10,000 limit will return in 2030.
WHAT’S NEW!
SALT deduction limit increases four-fold
