With key provisions of the Tax Cuts and Jobs Act (TCJA) set to expire after 2025, California taxpayers should begin planning now to avoid costly surprises. The sunset of these provisions could significantly impact both income and estate tax planning, especially for high-income earners, business owners, and real estate holders in California.
Key Considerations for CA Taxpayers:
SALT Cap & PTE Program
The $10,000 cap on state and local tax (SALT) deductions may remain unless Congress acts. For partners and S corporation shareholders, continuing participation in California’s Pass-Through Entity (PTE) elective tax program could help mitigate the impact. Strategic planning is crucial to maximize benefits before 2025.
Estate Tax Exemption Changes
The federal estate tax exemption is scheduled to drop from over $13 million to approximately $5 million per individual. For many California residents, especially those owning high-value real estate, this could mean exposure to estate tax liability. Now is the time to review and revise estate plans to secure current benefits and avoid future tax burdens.
Take Action Now
Tax planning in light of the TCJA sunset is complex and time-sensitive. At The Law Office of Sally Reddy, we guide clients through personalized strategies to minimize future tax exposure and protect their financial legacy.
Contact us today to schedule a consultation and get ahead of the changes.