Planning Around Tax Uncertainty

Why the rules keep moving

• Temporary provisions. To fit within budget rules, Congress often writes provisions with expiration dates. Many of the 2017 changes were set to expire after 2025 and were only extended in July 2025, halfway through the year.
• New provisions with end dates. The 2025 law’s deductions for tips, overtime, car loan interest, and seniors apply only to 2025 through 2028. The higher SALT cap drops back to $10,000 in 2030.
• Late guidance. When a law passes mid-year, the IRS may take months to issue forms, instructions, and rules on details, such as which occupations count as receiving tips or how employers must report overtime.
• “Extenders.” Some credits and deductions expire and are renewed, sometimes retroactively, after the year is over.
• State conformity. Colorado starts from federal taxable income but adds back or subtracts many items, and the legislature decides separately whether to adopt federal changes. For example, Colorado requires higher-income taxpayers to add back the federal qualified business income deduction, so that federal benefit doesn’t reduce their state tax.
• Court decisions and IRS enforcement priorities can change how existing rules are applied.

Planning when the future isn’t certain

Use the rules while you have them

If a benefit is scheduled to expire, such as the senior deduction or the higher SALT cap, consider timing income and deductions to use it while it’s available.

Keep flexibility

• Hold money in a mix of account types: taxable, traditional retirement, and Roth. Each is taxed differently, which lets you choose where to draw from when rates change.
• Spread large income events, like Roth conversions or property sales, across several years when possible.
• Use tools you can undo or adjust, such as extending a return to preserve an election.

Don’t let tax drive everything

A decision that makes sense only under a particular tax rule is a risky decision. Sell a property, retire, or change jobs for business and personal reasons first, and use the tax rules to improve the result.

Review before year end

Most tax-saving moves have to happen by December 31. A short review in the fall, when you have a good picture of the year’s income, is worth more than any amount of work in April. Clients who have had a major life change (marriage, divorce, a new business, a death in the family, a property sale, or retirement) benefit most.

Keep good records

When the rules change, the questions often become “When did you buy it?” or “What did you pay?” Keep purchase records, improvement receipts, and prior-year returns. They let you take advantage of whatever the rules turn out to be.

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