Maximize Your Tax Strategy Under the New Tax Law - How High-Income Earners Could Prepare and Potentially Save Thousands
A Look Back: The Impact of the 2017 Tax Cuts and Jobs Act (TCJA)
During his first term, President Donald Trump enacted the Tax Cuts and Jobs Act (TCJA), which significantly altered the U.S. tax code. Designed to stimulate the economy, the TCJA doubled the standard deduction, reduced individual and corporate tax rates, and increased the child tax credit. But many of these provisions are set to expire at the end of 2025.
According to the IRS and the Tax Policy Center, if no action is taken by Congress, most taxpayers — especially those with businesses, investments, and estates — will see their tax liabilities rise beginning in 2026 [source].
How the TCJA Changed the Game for Individual and Business Taxpayers
🔹 Standard Deduction vs. Itemization
Tax experts, notes the TCJA led many taxpayers to opt for the standard deduction due to its increase from $6,500 to $12,000 in 2017 — now $15,000 for 2025. This change simplified filing for many but reduced the number of people benefiting from itemized deductions [source].
🔹 SALT Cap & Estate Exemption
The TCJA also capped state and local tax (SALT) deductions at $10,000 — a blow to high-income earners in high-tax states. Estate tax exemptions were raised to over $14 million, but these too would be halved if TCJA provisions expire [source].
What Happens If TCJA Expires in 2025?
- The Tax Cuts and Jobs Act (TCJA), originally set to expire at the end of 2025, has been largely extended through the recently passed legislation known as “The One Big Beautiful Bill”. This new tax bill prevents the TCJA from expiring, making several of its key provisions permanent or extended beyond their original sunset dates
Key Impacts:
Tax Brackets and Rates
The lower individual tax rates enacted by TCJA (e.g., the top rate of 37% instead of 39.6%) are now locked in and will not revert to pre-2018 levels.Standard Deduction
The doubled standard deduction, a signature TCJA provision, is permanently extended—with annual inflation adjustments.State and Local Tax (SALT) Deduction
The SALT deduction cap increases from $10,000 to $40,000 (phasing out at higher incomes), offering more relief to high-tax state residents like California, New York, New Jersey, Minnesota, Connecticut etc.Child Tax Credit
The enhanced child tax credit from TCJA is now permanent and inflation-adjusted
The new tax bill effectively prevents the expiration of the TCJA, preserving its most business- and high-income-earner-friendly provisions. This creates long-term planning certainty, but it also increases the federal deficit over time.
Lakeline Tax experts in Cedar Park, Austin, and across Texas recommend high-income individuals and business owners conduct personalized tax scenario planning now — especially if they anticipate major events like selling a business, retiring, or transferring wealth.
Real Stories, Real Results
One of our Cedar Park clients, a high-net-worth investor and business owner, came to Lakeline Tax after receiving conflicting advice from a national chain. Through personalized tax planning, we helped him:
Optimize real estate deductions
Set up a family limited partnership
Minimize estate taxes
Save over $72,000 in taxes in just one year
Another Austin-based doctor was about to file using TurboTax but was unsure about reporting crypto gains and foreign investments. Our team not only corrected errors but also helped him restructure his holdings — leading to significant tax deferral opportunities.
Penny-Wise, Pound-Foolish: The Dangers of DIY Tax Software
While software like TurboTax and H&R Block works for simple returns, high-net-worth individuals and business owners face complex scenarios — think pass-through entities, multi-state income, real estate depreciation, and foreign assets.
A few reasons to reconsider:
DIY tools often miss nuanced deductions and credits.
IRS audits often target Schedule C and high-income S-corp filers.
Mistakes can trigger back taxes, penalties, and interest.
At Lakeline Tax, we believe in precision, personalization, and protection.
Action Steps: What Should You Do Now?
1. Schedule a Tax Review
Book a no-obligation consultation with our experienced Lakeline tax planning team.
2. Analyze Scenarios
Review how expiration vs. extension of the TCJA may affect your income, deductions, estate, and business plans.
3. Plan for 2025 and Beyond
Strategically time your income, investments, and gifting to align with the most advantageous tax year.
Ready to Optimize Your Tax Future?
Lakeline Tax Services | Cedar Park | Austin | Leander | Round Rock
🌐 www.lakelinetax.com
📞 Call us: (512) 335-8037
Major federal tax changes are here—and they bring both new opportunities and significant risks for high-income earners and business owners in Austin, Cedar Park, Leander, and surrounding Central Texas communities.
President Trump’s newly passed legislation permanently extends the 2017 tax cuts and introduces additional benefits such as expanded business income deductions, auto loan interest deductions for new vehicles, and even charitable write-offs for taxpayers using the standard deduction. However, these advantages are coupled with new limits on mortgage interest, casualty loss claims, and increased compliance scrutiny—especially for professionals and entrepreneurs with complex filings.
If you’re a real estate investor in Round Rock, a healthcare provider in Leander, or a growing small business owner in Cedar Park, our local team of credentialed tax experts at Lakeline Tax can help you understand the long-term impact of these changes. We’ll help you structure your business, optimize deductions, and prepare for IRS audits—before problems arise.
📍 Based in Cedar Park, we serve clients throughout the Austin metro, including Round Rock, Leander, Pflugerville, and beyond.
Households earning $217,000 to $1 million or more stand to gain the most, with estimated after-tax income increases between 2%–3% under the new legislation—thanks to extended lower rates and expanded deductions
Business owners in Cedar Park and Austin benefit from the permanent extension of the 20% Qualified Business Income (QBI) deduction, plus favorable entity planning options that can reduce overall tax liability when structured correctly.
Yes. The AMT relief originally granted in 2017 is made permanent, allowing high earners to continue using strategic deductions and credits without triggering the AMT
The estate tax exemption increases to $15 million and adjusts for inflation, providing expanded options for legacy transfers, gifting strategies, and trust planning
Yes. Even those taking the standard deduction can now deduct up to $2,000 in charitable contributions, while larger givers can still leverage donor-advised funds and charitable trusts for substantial tax advantages
Business owners and Individuals who purchase new, U.S.-assembled vehicles may now deduct up to $10,000 annually in auto loan interest, subject to income phase-outs.
But not every buyer or vehicle will qualify.
- To qualify, the car must be new and assembled in the United States — a rule some industry manufacturers say would exclude many popular imports. (Think popular models from Honda, Hyundai, Nissan, and Toyota.)
- The deduction will be limited to $10,000 per year and eliminated for individuals earning more than $100,000 or couples making over $200,000. So, higher-income households would see less benefit.
- The deduction will apply to cars purchased after December 31, 2024, and only if the vehicle is assembled in the U.S. The tax break is temporary, available each year from 2025 to 2028.
- ATVs, trailers, and campers wouldn’t be eligible.
- The Senate would also end the pre-owned electric/“clean” vehicle tax credit sooner, stopping it just 90 days after the OBBBA’s enactment.
Remember: These changes will apply to loans taken out in 2025 and after, but just for three years, through 2028.
More individuals, including those with high-deductible bronze or catastrophic plans, can now contribute to HSAs, offering triple-tax benefits ideal for high-income earners managing future medical costs
The increased state and local tax deduction cap—raised from $10,000 to $40,000—provides a strategic planning opportunity for those in high-tax states, especially before it reverts in 2030.
529 plans can now be used tax-free for tutoring, therapy, and workforce training programs, making them a powerful tool for family wealth planning and employee benefit design
With the new 2025 Big beautiful bill tax law changes many tax cuts made permanent and new phase-outs for certain benefits, proactive tax planning is essential to optimize deductions, reduce risk, and preserve wealth long term. Our local team of credentialed tax experts at Lakeline Tax can help you understand the long-term impact of these changes. We’ll help you structure your business, optimize deductions, and prepare for IRS audits—before problems arise.
Don’t take our word for it
“Lakshmi has been doing my taxes for the past 3 years. She’s always very professional, gives excellent advice, and makes sure I am aware of everything she’s doing in the process. The online document uploading system is also easy to use. Would highly recommend!” — Paola Mignone
The filing process was made easy and fast. Knowing you are leaving your taxes in the hands of professionals takes away a lot of stress. I wouldn’t hesitate to recommend Lakeline Tax Services to anyone. Thank you, Lakshmi!” — Brandon Evans
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Lakeline Tax provides tax preparation services for everyone including Self-Employed Tax Returns, Business Tax Preparation, Partnership & Corporate Taxes, Bookkeeping, Tax Planning, and Tax Resolution, serving Austin, Cedar Park, Leander, Liberty Hill, and surrounding cities, along with all 50 states. We utilize QuickBooks and are certified QuickBooks ProAdvisors. Get more done with us.