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What this video’s about

In this special edition of The Market Share, Paul Gifford, Chief Investment Officer at 1st Source Bank, is joined by Pam Stearns, CPA and head of the bank’s tax department. The two break down the impact of recent federal tax legislation from the “one big beautiful bill.”

Which tax breaks are truly permanent? What new deductions and limitations should investors prepare for? This discussion outlines the key provisions that matter most between now and 2029.

Key changes for individual tax filers

The most significant outcome of the new legislation is that many provisions from the 2018 Tax Cuts and Jobs Act, originally set to expire in 2026, have now been made permanent. But “permanent” in tax law simply means they won’t sunset automatically: it’s still subject to change by future Congressional action.

Charitable contributions

Starting in 2026, taxpayers who do not itemize will be allowed to deduct $1,000 (single) or $2,000 (joint) in cash donations to public charities. For those who do itemize, the deduction for charitable gifts of cash remains at 60% of adjusted gross income (AGI), a rule that is now permanent.

However, a new wrinkle has been added: the first 0.5% of AGI is not deductible. As Pam explains, “If you had a $200,000 adjusted gross income, the 0.5% would eliminate $1,000 of your deductions.”

SALT deduction and itemized limits

The state and local tax (SALT) deduction cap has been raised to $40,000, available from 2025 through 2029. This benefit begins to phase out at $250,000 in AGI for individuals and $500,000 for joint filers. Meanwhile, miscellaneous itemized deductions, including investment advisory fees and tax prep costs, remain permanently eliminated.

A new provision reduces overall itemized deductions for those in the 37% tax bracket, further tightening benefits for high earners.

Tax bracket preservation

Originally, individual tax rates were set to rise in 2026. The bill prevents that increase. Current brackets remain in place, from 10% up to 37%, rather than reverting to a top rate of 39.6%.

Temporary tax provisions to watch through 2028

Several temporary deductions and credits were also introduced and are scheduled to expire by the end of 2028. These present potential planning opportunities in the short term.

Senior bonus deduction

A new $6,000 deduction is available to taxpayers aged 65 and older. This phases out between $75,000 and $150,000 in AGI.

Auto loan interest

Buyers who purchase vehicles between now and 2028 may be eligible to deduct up to $10,000 in interest on the loan. To qualify, the vehicle must be assembled in the United States. This deduction phases out between $100,000 and $200,000 of modified AGI.

Trump accounts for children

This newly introduced program allows parents to open tax-deferred investment accounts with a one-time $1,000 contribution from the U.S. Treasury. It applies to children born between 2025 and 2028. While many implementation details are still unknown, the accounts are expected to be tied to a U.S. stock fund.

Estate and gift tax benefits made permanent

The bill also addresses estate planning in a way that will simplify long-term financial strategies for many high-net-worth families.

Unified exemptions

Both the lifetime gift tax exemption and the generation-skipping transfer tax exemption are now permanent. Had the law not passed, the exemptions would have reverted to $7.2 million. Instead, in 2026 they will rise to $15 million per individual, or $30 million for married couples who elect portability. These figures will continue to be indexed to inflation.

Annual gift tax exclusion

The annual exclusion for gifts rises to $19,000 per recipient without requiring a gift tax return. This amount will also increase with inflation going forward.

These higher thresholds reduce estate tax concerns for many families and provide more flexibility in long-term wealth transfer planning.

Conclusion

Recent tax legislation has created both stability and new opportunities for taxpayers. While some provisions are permanent, others are short-lived and require careful timing. Watch the video for a clear breakdown of what matters now and what to prepare for in the years ahead.

The world is changing fast. And as laws and markets shift, so should your strategy. Subscribe to The Market Share for monthly updates, expert analysis, and guidance on how these changes affect you.

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