Wealth Insights

Extended your 2025 tax return?

Key tax law changes to review before the October 15, 2026 extension deadline

Key takeaways

• The October 15, 2026 extension deadline is approaching. Review your 2025 return for missed deductions and planning opportunities for 2026.
• Standard deduction for 2025: $15,750 for single filers, $23,625 for heads of household, and $31,500 for married couples filing jointly.
• Itemizing? You could benefit from the higher SALT deduction cap of $40,000.
• Auto loan deductions: Eligible taxpayers who purchased a qualifying vehicle between 2025 and 2028 may be able to deduct up to $10,000 of auto loan interest.
• Gifting: The annual gift tax exclusion increased to $19,000 per recipient in 2025, creating additional opportunities for tax-efficient wealth transfers.
• Plan ahead. High-net-worth families should review estate plans in light of the estate tax exemption of $13.99 million for 2025 and increase to $15 million in 2026.

If you filed an extension for your 2025 federal income tax return, the October 15, 2026 filing deadline is approaching. As you prepare to finalize your return, it's important to understand several tax law changes that could affect your tax liability, deductions, and long-term financial planning. These provisions create new opportunities for many taxpayers and may warrant discussions with your tax advisor before filing.

Key 2025 tax changes to review before filing

“The One Big Beautiful Bill Act extended or made permanent many of the tax provisions originally enacted in 2017, providing taxpayers with greater certainty for future planning,” says Maya Brill, Regions Senior Wealth Strategist in Texas. “For individuals still completing their 2025 returns, now is an ideal time to ensure you're taking advantage of all available tax benefits.”

2025 changes at a glance

On the heels of the passing of the One Big Beautiful Bill Act for the 2025 tax year, the standard deduction increases to:

• $15,750 for single filers
• $23,625 for head of household
• $31,500 for married couples filing jointly

The IRS also increased some of the exclusions and specialty circumstances, which could create a notable tax opportunity for those who fall into certain categories.

• The annual exclusion for gifts increased to $19,000 for individuals and $38,000 for married couples in 2025. This was not changed by the One Big Beautiful Bill Act.
• The estate tax exemption for inheritance remains unchanged by the new laws for 2025 at $13,990,000. However, the One Big Beautiful Bill Act increases it to $15 million in 2026.
• An additional benefit in 2025 comes with the deduction of auto loan interest – you can deduct up to $10,000 in interest if purchased between 2025-2028, and the vehicle must have final assembly in the U.S. It is also important to note the income limitations for this deduction, which phases out for taxpayers with a modified adjusted gross income (MAGI) exceeding $100,000 for single filers and $200,000 for joint filers and is eliminated at $150,000 MAGI for single filers and $250,000 for joint filers.
• Beginning in 2025, the SALT deduction cap increases from $10,000 to $40,000 for many taxpayers, subject to income-based phaseouts beginning at $500,000.
• Eligible children born between 2025-2028 may qualify for a Trump Account that is funded with $1,000. Treated like a qualified retirement plan, up to $5,000 per year can be contributed to these accounts for children under 18 years old.

“Clients should think about what they may want to accomplish financially,” says Brill. “On the estate side, the annual gifting exclusion increase to $19,000 in 2025 provided additional gifting opportunities for smaller gifts that can be made for life’s needs today.”

Planning now for future tax years can make a difference. Anything from the purchase of a car for a child, expenses to pay for college or graduate school, or opening an investment account for a child. This can be an important step for the road ahead and has the potential to help build a better financial future.

The increase in the lifetime gift and estate tax exemption is notable, says Brill. “The $15 million lifetime gift tax exemption becomes a significant part of the narrative for high-net worth clients,” said Brill.

This increase creates an even greater opportunity to allow the next generation to enjoy such assets in the future while removing them from the current generation’s taxable estate. 

Planning makes perfect

“We consider ourselves to be in the Golden Age of Estate Planning right now,” says Brill. “And the tax law landscape remains favorable for impactful, generational legacy planning.”

No matter what generation you belong to, Brill notes the increases in the federal gift and estate tax rules create a significant opportunity for sharing generational wealth and building an ongoing legacy.

“Wealth planning with a strategic focus will likely be more methodical, deliberate and thoughtful,” explains Brill. “Depending on your financial picture, looking at your strategic wealth plan should be done thoughtfully. A major purpose of planning is to prepare for scenarios and take advantage of new opportunities which may prove pivotal in strengthening your financial position during the ongoing generational wealth transfer. Testing financial goals and aspirations with financial science provides the best forecasting possible in strategy selection.”

Common considerations

1. Income tax planning

Estate planning isn’t all about estate and gift taxes; it also includes income tax planning. Assets included in your estate upon your passing are eligible for a step-up in cost basis, reducing capital gains for inheritors. For estates under the exemption amount, it may be prudent to hold onto low basis assets until death. For estates over the exemption amount, trust structuring and ongoing asset selection can provide flexibility for step-up in basis planning. In addition, for those in community property states, couples may consider equalizing ownership of appreciated assets to potentially receive a full step-up in basis upon the death of either spouse. However, this strategy may not be advisable if divorce is a possibility.

2. Appreciating assets

If a client with a taxable estate has assets that are likely to appreciate significantly over their lifetime, such as income-producing real estate that they don’t need for their personal expenses, gifting can create a tax advantage.

“Gifting part of that real estate to their children takes the current value out of the parents’ estate and the appreciation is to the benefit of the children while not increasing the parents’ potential estate tax liability,” says Brill.

Our advisors often recommend transferring the appreciable asset into a trust rather than giving it outright to the kids. “If the trust is structured properly, the trust assets can be protected from estate tax when the parents pass away and when the children pass away.”

Action Items before October 15, 2026

As the extended filing deadline approaches, consider the following:

• Review whether itemizing deductions provides greater benefit than the increased standard deduction.
• Confirm eligibility for the new auto loan interest deduction.
• Verify retirement plan contributions and catch-up amounts.
• Review SALT deduction opportunities if you itemize.
• Discuss estate, gifting, and wealth transfer strategies with your tax and financial advisors.
• Ensure all required tax documents have been received and included before filing.

Final thoughts

The 2025 tax year introduced several meaningful changes that create planning opportunities for many taxpayers. If you filed an extension, the period before the October 15, 2026 deadline provides a valuable opportunity to review your return carefully, maximize available deductions, and coordinate any tax-saving strategies with your broader financial and estate plans.

A proactive review now could help reduce your current tax liability while positioning you for long-term financial success.

Talk with your Regions Wealth Advisor about:

1. Adapting your tax planning strategies.
2. Any potential changes to consider for coming years.

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