Drift or Strategize: Outpacing the 2025 Tax Sunset with Foresight and Flow

Most taxpayers are drifting toward 2026 without a clear strategy — unaware of the current pulling them closer to higher taxes, reduced exemptions, and missed opportunities.

But like a jellyfish navigating ocean currents with subtle precision, high-net-worth individuals who act now can move with clarity and control. This is a moment not to panic — but to position. The 2025 tax sunset may seem distant, but the window to act is already narrowing.

What’s Changing in 2026?

Several key provisions from the 2017 Tax Cuts and Jobs Act (TCJA) are scheduled to expire by the end of 2025:

Top Income Tax Rate Reversion: Rising from 37% to 39.6%
Estate & Gift Tax Exemption Cut: Dropping from $13.61M to around $7M per person
Business Deductions Phase-Out: Including 100% bonus depreciation and QBI benefits
Potential SALT Cap Revisions under active legislative debate

Whether these changes are fully enacted or partially extended, the risk remains: the best opportunities come to those who plan early.

Who Will Be Impacted?

Individuals with net worths above $10M
Business owners and real estate investors
Families considering legacy, charitable, or estate transfers
Entrepreneurs seeking long-term exit and tax reduction plans

Proactive planning matters more than ever.

Strategic Moves to Consider

1. Charitable Planning That Multiplies Impact

Tools like CRTs, CLTs, and DAFs reduce taxes while enhancing giving. Pair them with life insurance or installment sale strategies for greater leverage. Other charitable strategies are available as well — including non-traditional approaches that are only accessible through a Virtual Family Office, offering advanced planning opportunities not typically available through conventional channels.

2. Entity Structuring for Multi-Layer Efficiency

Optimize your structure — S-Corp for income splits, C-Corp for retained earnings, and FLPs for discounted gifting. These changes can drive both immediate and long-term gains.

3. Real Estate and Investment Optimization

Use cost segregation, charitable option donations in development, and 1031 exchanges. Explore Secure Act 2.0 and Roth conversion windows.

4. Maximize Available Tax Credits

R&D, clean energy, and hiring credits are powerful and often overlooked. Engage professionals to unlock underutilized credits and possibly monetize them.

5. Gifting and Wealth Transfer While the Window Is Open

Use today’s generous lifetime exemption to transfer appreciating assets. SLATs, ILITs, and valuation strategies are highly effective under current law.

Why VFO Planning Outperforms Siloed Advice

A Virtual Family Office integrates your CPA, attorney, investment advisor, and insurance strategist into one aligned force — ensuring that timing, strategy, and compliance all work together. Whether we collaborate with your team or bring ours, integration is the key.

Final Thought: Act Before the Current Shifts

2025 isn’t just a countdown — it’s a decision point. The right moves today can reduce your lifetime tax burden, elevate your philanthropic impact, and secure generational wealth transfer.

📩 Schedule your private strategy call now: Contact Us

This article is educational and does not constitute financial or legal advice. For personalized recommendations, consult a licensed advisor or tax attorney.