4 Way-out to Reduce Your Tax Bill
Tax Strategy Is Wealth Strategy
Tax law changes don’t just affect your refund — they affect your long-term wealth, real estate investment strategy and cash flow planning.
The One Big Beautiful Bill Act (OBBBA) introduced several temporary provisions that could significantly reduce your 2025 tax liability. However, most of these benefits phase out at certain income levels and expire between 2028 and 2029.
At Laura Graves Real Estate, many of our clients are homeowners, investors or business owners. Understanding how these changes interact with your income — and your real estate decisions — is critical.
Here are four strategic moves to consider.
1. Reevaluate Whether to Itemize (Especially with the Higher SALT Cap)
One of the most impactful temporary changes is the increase to the State and Local Tax (SALT) deduction cap — rising from $10,000 to $40,000 between 2025 and 2029.
For many property owners, this changes the math entirely.
For 2025:
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Standard deduction:
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$31,500 (married filing jointly)
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$15,750 (single filers)
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If your combined itemized deductions — mortgage interest, charitable giving and state/local taxes (up to $40,000) — exceed your standard deduction, itemizing could produce meaningful savings.
⚠️ Watch the income phaseout
The $40,000 SALT cap begins phasing out at $500,000 in modified adjusted gross income (MAGI). At $600,000 MAGI, the cap reverts to $10,000.
Laura’s Recommendation:
If you own property in high-tax states or hold multiple properties, run detailed projections. This temporary window could materially change your real estate holding strategy through 2029.
2. Maximize New Targeted Deductions (If You Qualify)
Several above-the-line deductions were introduced — meaning you can claim them whether you itemize or not. However, they are income-sensitive and temporary.
Qualified Overtime Pay Deduction
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Up to $25,000 (married)
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Up to $12,500 (single)
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Phases out starting at $300,000 MAGI (married)
Only the “half-time” portion of overtime pay qualifies.
Qualified Tips Income Deduction
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Up to $25,000 per return
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Must be formally reported on W-2 or 1099
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Phases out beginning at $300,000 MAGI (married) and $150,000 (single)
Auto Loan Interest Deduction
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Up to $10,000 interest on new personal-use vehicles assembled in the U.S.
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Phases out starting at $200,000 MAGI (married)
Laura’s Recommendation:
If you’re a small business owner or high-earning professional near these thresholds, income timing matters. Strategic deferrals or deductions may preserve eligibility.
3. Seniors: Be Strategic With 2026 Roth Conversions
For taxpayers 65 and older, a temporary deduction offers:
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$12,000 (married couples)
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$6,000 (single filers)
But it phases out quickly:
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Over $150,000 MAGI (married)
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Over $75,000 MAGI (single)
If you’re planning a Roth conversion in 2026, it could unintentionally push you above the income threshold — eliminating the entire deduction.
Laura’s Recommendation:
Model any planned conversions carefully. A Roth strategy that looks smart long term could cost you valuable short-term deductions if poorly timed.
4. Optimize Your Income to Stay Below Phaseout Limits
Many of the most valuable tax breaks are tied directly to MAGI thresholds. Strategic income management in both 2025 and 2026 can protect eligibility.
For 2025 (Before Filing Deadline)
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Make HSA contributions
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Make deductible IRA contributions (if eligible)
For 2026 Planning
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Delay selling highly appreciated stock if it triggers large capital gains
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Postpone exercising stock options if it pushes income too high
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Maximize 401(k) and HSA contributions
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Delay large Roth conversions if near phaseout thresholds
Laura’s Recommendation:
Income smoothing is often more powerful than income reduction. The goal isn’t just earning more — it’s qualifying for the right deductions while doing it.
Why This Matters for Real Estate Owners
Tax savings increase liquidity. Liquidity increases opportunity.
Whether you’re:
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Considering buying a second home
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Selling an investment property
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Upgrading to a primary residence
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Expanding your rental portfolio
Smart tax positioning can improve buying power and long-term returns.
Temporary provisions mean there is a limited planning window through 2029. Waiting until the last minute could mean leaving money on the table.
Laura Graves Real Estate Perspective
Real estate decisions should align with tax efficiency, not work against it. Market timing and tax timing often intersect — especially for high-income households and investors.
Before making major moves in 2025 or 2026, coordinate with your CPA and financial adviser. Strategic planning now could create significant savings over the next several years.
Ask Laura To Align Your Strategy With Your Tax Plan?
If you’re considering buying, selling or repositioning assets in 2025, let’s discuss how timing, leverage and tax positioning fit into your overall wealth strategy.
Email: [email protected]
