Insights & Perspectives from Financial Advisors Near You

Stay informed with timely commentary, thoughtful analysis, and real-world financial insights from the team at Cahaba Wealth Management. Our blog and podcast offer a deeper look into the trends, strategies, and market developments shaping today’s financial landscape. Whether you’re looking to better understand investment principles, navigate economic shifts, or explore planning strategies for your future, we are here to help you make more confident, informed decisions.

Tag Archives: Financial Advisor

New Tax Bill: Keeping You Updated

7/2025

By Stetson Ponder

By this point if you have turned on any news channel, you are aware that there is a new tax bill that was recently ratified and signed by Congress and President Trump. As your financial planning partners, we wanted to take some time to clarify what this means for you and your taxes this calendar year and beyond.

What’s This About?

The new bill primarily aims to make the majority of the 2017 tax cuts permanent, preventing them from expiring as originally scheduled. Most provisions in the legislation focus on extending individual and business tax breaks established in 2017, ensuring lower rates and expanded deductions for both individuals and businesses.

What’s New?

A couple changes that will affect all filers are the solidification of the tax brackets and the standard deduction increase. The tax brackets will now be made permanent at 10%, 12%, 22%, 24%, 32%, 35% and 37% for each respective filing status and income level. Single filers can now deduct $15,750, Head of Household filers can deduct $23,625 and Married, Filing Jointly filers can deduct $31,500. On top of that, the new bill allows all taxpayers, including those who take the standard deduction, to deduct up to $1,000 ($2,000 for joint filers) in charitable contributions starting in 2026. For those who itemize, only charitable contributions exceeding 0.5% of AGI are deductible. High-income donors will see a new deduction rate cap at 35%, lowered from the previous 37%.

The largest change is the cap raise on the itemized deduction of state and local taxes (SALT) to $40,000 for years 2025-2029, adjusted 1% annually for inflation starting in 2026. This cap is income tested, however, those who have incomes above $500,000 will be phased out. The rate is 30% for income above the threshold, meaning that for every $1 of Adjusted Gross Income above the cap, the allowable SALT deduction is reduced by $0.30. As a result, anybody with AGI over $600,000 will be reduced to the $10,000 minimum deduction ($100,000 over the cap x 30% penalty = $30,000 penalty from $40,000 cap). The deduction cannot be reduced below the $10,000 floor.

Another one of the most notable updates pertains to the additional tax deductions for individuals 65 or older. The adjusted bonus deduction begins at $6,000 per qualified individual, should your Modified Adjusted Gross Income (MAGI) fall within the eligibility. For those Married filing Jointly, that MAGI bracket is a full $6,000 for any couple under $150,000 and begins to phase out until the $250,000 line is crossed. This is in addition to the previous $1,550 (now $1,600) per qualified individual that MFJ couples got last year for those above 65 years old. Here is a chart to help illustrate:

	Base Standard Deduction	Additional Deduction for >65 Years Old	NEW Bonus Deduction (MAGI phase-out)	Total Deduction (Age 65+)
Single	$15,750	$2,000	$6,000	$23,750
Head of Household	$23,625	$2,000	$6,000	$31,625
Married, Filing Jointly	$31,500	$3,200 (both 65+) $1,600 (one 65+)	$12,000 (both 65+) $6,000 (one 65+)	$46,700 (both 65+) $39,100 (one 65+)

Additionally, the estate tax exemption that was set to expire at the end of this year was made permanent and raised to $15 million per individual ($30 million per couple) in 2026. This exemption is indexed for inflation every year afterwards ensuring that the threshold will automatically increase each year, unless voted on by Congress to reduce it.

Below are some other pertinent provisions on individual taxes:

Child tax credit made permanent at $2,200 in 2026, will be inflation adjusted moving forward
Auto loan interest made deductible for new autos assembled in the US for years 2025-2028 (limited to $10,000, MAGI phase out after certain brackets)
Up to $25,000 of tip income is deductible for individuals in traditionally tipped industries (10% phase out after reaching AGI limit)

What Should I Do Next?

We encourage you to review your current tax situation considering these changes, especially if you or a loved one is above the age of 65. The increased standard deduction allows for many new opportunities and strategies to be explored. As always, our team is available to discuss how these updates may impact your individual circumstances and fits into your unique financial plan. If you have any questions or would like to schedule a review, please do not hesitate to contact us!

Stetson Ponder is a Financial Planning Analyst in the Atlanta office of Cahaba Wealth Management, www.cahabawealth.com.

Cahaba Wealth Management is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Cahaba Wealth Management is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Content should not be construed as personalized investment advice. The opinions in this materials are for general information, and not intended to provide specific investment advice or recommendations for an individual. Content should not be regarded as a complete analysis of the subjects discussed. To determine which investment(s) may be appropriate for you, consult your financial advisor.

Market Updates: Tariff Edition

4/2025

Well that was a week…

By now, we assume all Cahaba Wealth clients know that we do not react to short-term movements in the stock market. As we’ve said time and again, market volatility is a constant that allows stocks to generate higher returns than safer investments like cash and bonds. Successful long-term investment is difficult because it requires discipline. Short-term pullbacks are frequently accompanied by narratives that only serve to reinforce the accompanied anxiety. Telling yourself to remain calm and not react during these periods is what separates the opportunities from setbacks.

We were not surprised that President Trump announced tariffs on Wednesday. What was a surprise was the breadth of the sweeping tariffs. This subsequently caused panic and the resulting selloff in stocks. At the close of Friday’s trading, the S&P 500 was down nearly 10% in the last two days, and the S&P 600 (US small company stocks) lost almost 12% in that span. Selling has been indiscriminate and has spread to stocks around the world. We are not ones to react with panic to this kind of movement, but we certainly feel the need to comment on this climate.

As many of our long-term clients know, we have lived through several bizarre scenarios over the past 30 years. Between the 2000-2002 dot.com bubble bursting, the financial crisis of 2008-2009, Covid, and the bond bear market of 2022, it’s been a whirlwind. During these phases, we have used financial planning and cash flow projections to help our clients navigate these various challenges. In most cases, they continue to thrive and achieve financial goals. Even with those specific market downturns, portfolios continue to be positive over that timeframe, and investing remains the best option to outstrip inflation and grow assets. That perspective hasn’t changed with the recent announcements.

Perhaps one positive of this week is the return of bonds to the “safety” trade. US bonds are up roughly 1% this week, over 3.5% year to date, and are providing the cushion that a balanced portfolio should hope for during stock downturns. Diversification works! With the 10-Year Treasury at or below 4%, we may also see a decrease in Federal interest payments and the possibility to refinance recent mortgages.

The stated goal of the tariff strategy is to bring more balance to the global trade landscape and improve US national security. Both goals are logical and appear to be in the best long-term interest of the United States. However, achieving these goals is complicated. Onshoring manufacturing and negotiating reciprocal trade agreements does not happen overnight. In addition, the near-term impact of tariffs is perceived by economists as an immediate tax. The desire to have the United States economy increase the percentage of GDP generated through manufacturing is achievable but will need to be navigated carefully to avoid major economic disruption.

The unpredictable nature of how the tariff strategy was announced is causing the markets the most consternation. One thing that markets hate is uncertainty. Is The President simply using this as a negotiating tactic with each country to get a better deal? How long will these tariffs be in place? Will the tariffs end up either receding or going away altogether? We currently don’t know the answer to any of these questions. What we do know is that once clarity returns, stocks will rejoice.

We hold our convictions that planning and long-term views of cash flow allow clients to weather any storm. Your asset allocation is designed for this very situation. Where possible, we will explore opportunities to use this downturn to our clients’ long-term advantage. If you feel more anxiety and concern about your portfolio than you normally might, it may be a sign that your risk tolerance is not in line with your asset allocation. Please reach out if you would like to discuss in greater detail. In the meantime, we are confident that this pullback will join the previous selloffs as a long-term buying opportunity.

As always, thank you for your trust and confidence.

Year-End Tax Planning Items: What You Need to Know

12/2024

By Stetson Ponder

As we come to the end of 2024, many families and individuals find themselves reflecting on the year that was. A portion of this reflection certainly involves their financial health and ways to improve for the upcoming year. At Cahaba Wealth, here is an overview of tax-planning strategies that we use to ensure our clients are as tax-efficient as possible.

Tax Loss Harvesting

In taxable accounts, taking a capital loss can be a strategic way to offset other capital gains that may have occurred over the year.
Selling off long-term investments at a loss and reinvesting them in similar positions allows you to “harvest” the negative return while maintaining the integrity of the portfolio.
In general, we look for these opportunities during periods of market volatility.
We also look for areas where capital gains may be harvested for those in the 0% capital gains tax bracket (those in lower-income filings).

Required Minimum Distributions

Those who turn 73 or older this year must take required minimum distributions (RMDs) from their IRA accounts by April 1, 2025.
Donating to qualified charities by way of Qualified Charitable Distributions (QCDs) for those 70 ½ years or older is a way to lower your taxable income and maximize your charitable income.
At Cahaba Wealth, we work individually with our clients to strategize the best way to disperse each respective account’s RMD.

Roth Conversions

With a Roth IRA, contributions are made with after-tax dollars and earnings can grow tax-free. In addition, Roth IRAs do not have RMDs associated with them, allowing your investments a longer time horizon.
A Roth conversion involves transferring retirement assets from a traditional IRA, SEP IRA, or 401(k) plan into a Roth IRA.
Roth accounts can be beneficial if you expect to be in a higher tax bracket in retirement or if you want to reduce your taxable income in retirement.
Roth Conversions should be considered carefully, as these conversions are irreversible and have significant tax implications.
If you have questions about your specific situation and whether a Roth conversion may be for you, Cahaba Wealth would be more than happy to help you think through this process.

Retirement Account Contributions

Maximizing your contributions to tax-advantaged retirement accounts lowers your taxable income for the year.
Contribution limits to IRAs for those under 50 is $7,000 this year and an additional $1,000 for those over 50. This limit includes contributions to both a traditional and a Roth IRA.
Contribution limits to 401(k) plans are capped at $23,000 this year for those under 50. “Catch-up” contributions of up to $7,500 are available to those over 50.
The contribution limit to SIMPLE IRA plans is $16,000, with an additional $3,500 for those 50 and older.
Contributions that can be deducted from SEP IRA plans are limited to either 25% of the employee’s pay or $69,000, whichever is less.

Charitable Giving

Donations to qualified 501(c)(3) organizations can be deducted on a tax return.
Deciding on a donation amount and charity by year-end enables you to make the contribution and receive the associated tax benefits in the same year.
Consider donating appreciated securities to avoid capital gains on highly appreciated assets.

Stay Informed and Prepared

Effective end-of-year tax preparation involves multiple facets, and there is no “one size fits all” answer to any tax situation. Your unique financial situation, goals, and life stage will predicate which strategies are best for you.

Reach Out

At Cahaba, our strategy aims to wholly encompass everything that makes you and your family unique when creating a tailored financial plan. If any of these topics spark your interest or you generally would like more financial guidance, please contact our team.

Sources

Stetson Ponder is a Financial Planning Analyst in the Atlanta office of Cahaba Wealth Management, www.cahabawealth.com.