2025 Tax Updates for Wealth Management Professionals: Estates, Trusts & High-Value Investments
Vivian Cabaniss
?? ??Robert Half Tax Accountant and Consultant | Tax Resolution Specialist AFTR 2025 | AP and AR Specialist | International Tax Specialist | CPA Candidate | Enrolled Agent (in progress) ?? AGT Virtual Auditions ??
As a tax accountant at Robert Half, I work closely with high-net-worth individuals, family offices, and estate planners to navigate the evolving tax landscape. With 2025 bringing key updates in estate taxes, trusts, foreign investments, and cryptocurrency reporting, it’s crucial to proactively prepare clients for these changes. Here’s a breakdown of what tax professionals need to know—and actionable strategies to implement.
1. Estate & Gift Tax Updates: Planning Before 2026
Key Update: The federal estate tax exemption remains at $12.92 million per individual ($25.84 million for married couples) in 2025. However, unless new legislation is passed, it will drop to approximately $6 million per person in 2026 when the Tax Cuts and Jobs Act (TCJA) expires.
Real-World Scenario
?? A client with a $15 million estate is considering transferring assets to heirs. If they wait until 2026, they could face a 40% estate tax on nearly $9 million of their estate due to the lower exemption. ? Solution: Advise clients to utilize tax-efficient gifting strategies or irrevocable trusts before the exemption reduction.
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2. Trust Taxation: Minimizing Compressed Tax Brackets
Key Update: Trusts continue to be taxed at highly compressed brackets, reaching the 37% top tax rate at just $13,450 in income.
Real-World Scenario
?? A family trust generating $100,000 in passive investment income is taxed at 37% on most of it. If the trust distributes income to beneficiaries in lower tax brackets, it could significantly reduce the tax burden. ? Solution: Consider distributing income strategically to beneficiaries to leverage their lower individual tax brackets.
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3. Cryptocurrency & Digital Asset Taxation: Expanded IRS Oversight
Key Update: Starting in 2025, brokers must report cryptocurrency transactions to the IRS on Form 1099-DA. Digital assets remain subject to capital gains tax and must be reported as property transactions.
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Real-World Scenario
?? A client who sold Bitcoin for $500,000 after a five-year hold faces long-term capital gains tax (20% federal, plus possible 3.8% Net Investment Income Tax). ? Solution: Consider tax-loss harvesting to offset gains or charitable donations of crypto assets for tax deductions.
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4. Foreign Investments: FATCA, FBAR & Compliance Risks
Key Update: U.S. taxpayers with foreign assets exceeding $10,000 must file an FBAR (FinCEN Form 114). FATCA (Form 8938) imposes additional reporting requirements for foreign bank accounts and investments over $50,000 ($100,000 for joint filers).
Real-World Scenario
?? A client owns offshore investments in Switzerland worth $500,000 but failed to file Form 8938. The IRS penalty for non-compliance can be $10,000 per violation. ? Solution: Ensure clients file the correct international tax forms to avoid steep penalties and audits.
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5. Post-2025 Planning: Anticipating Higher Taxes
With many TCJA tax breaks set to expire after 2025, tax professionals should prepare clients for: ? Lower estate tax exemptions (~$6M per person instead of $12.92M) ? Higher individual tax rates ? Elimination of key business deductions
Real-World Scenario
?? A high-income client earning $800,000 annually will face a higher top tax bracket in 2026 if the TCJA rates expire. ? Solution: Consider accelerating income into 2025 (e.g., bonuses, stock options) to lock in lower current tax rates.
Key Takeaways for Tax Professionals
? Prioritize estate planning before the exemption potentially decreases. ? Maximize tax-efficient gifting and trust strategies for high-net-worth clients. ? Ensure crypto and foreign investments are properly reported to avoid audits. ? Proactively manage income timing before potential tax rate increases in 2026.
At Robert Half, we help tax professionals navigate complex wealth management tax strategies with confidence. Have questions? Let’s discuss how to optimize your clients’ tax positions before these changes take effect.
?? Reach out today to schedule a consultation.