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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years<\/strong> Trusted by<\/strong> President Trump\u2019s \u201cOne Big Beautiful Bill,\u201d<\/a> recently signed into law, overhauls the federal tax code and reshapes how high earners manage wealth<\/a>, investments, and estate planning.<\/p>\n Read More: Here\u2019s How Much Every Tax Bracket Would Gain \u2014 or Lose \u2014 Under Trump\u2019s \u2018Big, Beautiful Bill\u2019<\/a><\/strong><\/p>\n Discover Next: How Middle-Class Earners Are Quietly Becoming Millionaires \u2014 and How You Can, Too<\/a><\/strong><\/p>\n \u201cAt the end of the day, this kind of overhaul doesn\u2019t just impact income,\u201d said Kevin Knull, a certified financial planner and CEO of TaxStatus. \u201cIt affects legacy, liquidity and charitable goals. High-net-worth families are going to want to take a look at their financial picture in totality and consider how each piece of their plan interacts in a more integrated way.\u201d<\/p>\n<\/p>\n Here are five <\/strong>things the wealthy should do to prepare for Trump\u2019s income tax plan.<\/a><\/p>\n Max Out Retirement Contributions and Consider Roth Conversions<\/p>\n The law extends key provisions of the Tax Cuts and Jobs Act into 2025 and beyond, preserving favorable tax brackets for now. That makes it an opportune time for wealthy individuals<\/a> to reassess Roth conversions while higher-rate brackets are still in play.<\/p>\n \u201cSome strategies to consider would be Roth conversions of pre-tax qualified retirement assets, taking additional distributions from their IRAs, and harvesting capital gains from their portfolio,\u201d said Matt Mancini, Wilmington Trust<\/a> Wealth Planning Team Leader.\u00a0<\/p>\n He added, \u201cHowever, wealthy taxpayers will need to remain aware of their income, as some important deductions could potentially phase out for them if they have too much income,\u201d he said. \u201cTax projections with their accountants will be vital in planning.\u201d<\/p>\n Optimize Business Structures for Flexibility<\/p>\n The \u201cOne Big Beautiful Bill\u201d left pass-through taxation intact and expanded the state and local tax SALT deduction for businesses, making entity structure relevant again. Business owners should review their S-Corp or limited liability company (LLC) classifications to take advantage of evolving federal and state tax regulations.<\/p>\n \u201cIf income taxes drop, it may make sense to take more compensation as salary now, and later shift toward capital gains, dividends, or equity-based pay if those become more favorable,\u201d said Elina Linderman, founder of La Rusa Financial<\/a>. \u201cBusiness owners should also re-evaluate how they pay themselves \u2014 W-2 wages versus distributions versus retained earnings.\u201d<\/p>\n Update Estate and Trust Plans<\/p>\n The new law raised the individual estate tax exemption to $15 million under the 2025 policy, creating a limited opportunity for wealth transfers<\/a> free of federal estate tax. Families should act now to restructure or gift accordingly before future adjustments reverse these benefits.<\/p>\n<\/p>\n \u201cThese changes could have sweeping implications for estate and philanthropic strategies,\u201d Knull said. \u201cIf the estate tax exemption is reduced as expected after 2025, wealthy individuals might consider making larger lifetime gifts earlier.\u201d<\/p>\n He added that trust structures, such as intentionally defective grantor trusts (IDGTs) or generation-skipping trusts (GSTs), could still be viable but would need to be carefully tailored to the new law.<\/p>\n Manage Capital Gains and Investment Timing<\/p>\n While income tax has been reduced for many Americans, high earners are still subject to income taxes, though at lower rates. Capital gains taxes<\/a> remain in effect, making it critical for wealthy investors to review how and when they realize investment returns.<\/p>\n \u201cFor those subject to income tax, strategies that involve deferring income are not going to be nearly as interesting,\u201d said Ari Greenman, partner at Lenox Advisors. \u201cMost strategies around qualified plans, like 401(k)s, aim to lower taxable income today, deferring taxes into the future, and then taking income when you remove the assets later on.\u201d<\/p>\n Consider the Bigger Picture<\/p>\n From charitable planning to liquidity and legacy, this tax overhaul touches every part of a high-net-worth financial strategy.\u00a0<\/p>\n \u201cThe key is scenario planning: families should work with advisors to model a few credible legislative paths and build adaptable frameworks, especially when it comes to timing asset sales, option exercises, or distributions,\u201d said Jean-Baptiste Wautier,<\/a> private equity CIO and World Economic Forum speaker.<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"kate_sept2004 \/ Getty Images Commitment to Our Readers GOBankingRates’ editorial team is committed to bringing you unbiased reviews…\n","protected":false},"author":3,"featured_media":115902,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[64,8726,6459,255,67,132,68,258],"class_list":{"0":"post-115901","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-gobankingrates","10":"tag-money","11":"tag-personal-finance","12":"tag-united-states","13":"tag-unitedstates","14":"tag-us","15":"tag-wealth"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114965521719825930","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/115901","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=115901"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/115901\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/115902"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=115901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=115901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=115901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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