Kristie Ondracek welcomes listeners to a special episode of the TXCPA Houston Virtual Rolodex, featuring quarterly updates from corporate sponsors. This episode spotlights Goodman Financial, represented by Senior Financial Advisor Hunter Coday, who provides insights on the most recent tax legislation, key impacts for individuals and families, Social Security changes, and current market conditions.

Tax Law Updates: Key Provisions from the Recent Bill

High-Level Takeaways

·        Recent Legislation: A major tax bill with extensive provisions has been signed, aiming to continue or adapt key elements of the 2017 Tax Cuts and Jobs Act.

·        Firm's Approach: Goodman Financial has reviewed the legislation and distributed a client-focused summary on relevant changes.

Key Provisions

·        Standard Deduction & Tax Rates:

·        Standard deduction remains high and is now permanent.

·        Tax rates, previously set to revert to higher levels, are now extended at current rates for the foreseeable future.

·        Enhanced Senior Deduction:

·        New deduction for individuals aged 65+, available for the next three years.

·        Begins phasing out at $150,000 for married filing jointly, requiring careful income planning to maximize the benefit.

·        State and Local Tax (SALT) Deduction Cap:

·        The deduction cap temporarily increases from $10,000 to $40,000 through 2029, particularly benefiting those who itemize deductions.

·        The $40,000 limit phases out at $500,000 of income and reverts to $10,000 at $600,000, highlighting the importance of strategic planning.

·        Estate Tax Exemption:

·        The exemption has been increased from just under $14 million to $15 million per person (rather than being halved), offering clarity and planning flexibility for those with larger estates.

·        Advisory Note: Some provisions are labeled "permanent" but could change with future legislation, so periodic review is recommended.

Social Security Fairness Act: Major Changes

·        Background: The Social Security Fairness Act, passed earlier this year, eliminates two longstanding provisions:

·        Windfall Elimination Provision (WEP)

·        Government Pension Offset (GPO)

·        Impact:

·        People with pensions who previously saw their Social Security reduced (sometimes entirely) now have access to full or increased benefits.

·        Effective retroactively, many recipients have already received lump sum adjustments and higher monthly payments since early 2024.

·        Individuals who previously did not qualify for Social Security due to these provisions are encouraged to re-evaluate their eligibility.

·        Planning Note: Increased payouts may affect tax situations, requiring careful review.

·        Sustainability: While positive for recipients, higher outlays may impact Social Security’s long-term funding, an issue expected to be addressed in future reforms.

·        Example Shared: A federal pensioned widow, previously denied survivor benefits, now receives $3,000–$4,000 more each month.

Market and Economic Update

·        2025 Overview: The overriding theme is uncertainty—driven by market volatility, tariff news, and broader economic factors.

·        Market Recap:

·        Stocks experienced a sharp drop in April 2025 after tariff announcements but have since rebounded, with the S&P 500 up approximately 7% year-to-date.

·        Investor Guidance:

·        Assess risk tolerance and time horizon: Those closer to needing their funds should avoid high-risk investments during volatile periods.

·        Volatility can present opportunities for long-term investors with excess cash.

·        Avoid reactionary decisions—staying the course with a well-structured plan is often the best strategy.

·        Firm Philosophy: Goodman Financial emphasizes regular review of portfolio alignment with individual risk tolerances and long-term goals, not timing the market.

Practical Advice for Listeners

·        Proactive Planning:

·        Review tax and financial situations during July and August, before the end-of-year rush.

·        Coordinate with financial advisors, CPAs, or attend community classes to understand how new rules affect your personal situation.

·        For those near critical income or age thresholds, seek tailored advice to take full advantage of current deductions and exemptions.

Hunter W. Coday

Senior Financial Advisor

Goodman Financial Corporation

Money Manager | Financial Advisor | Philanthropy

SERVING CLIENTS FOR OVER 30 YEARS

5177 Richmond Avenue, Suite 700 | Houston, TX 77056

Phone (713) 599-1777 x108 | Toll Free (877) 599-1778

Direct (346) 867-1058

hcoday@goodmanfinancial.com | www.GoodmanFinancial.com