Introduction

Madison: Hello, everyone, and welcome to Not Just Numbers, Honest Conversations with a Financial Advisor and Lawyer. I am Madison Demora and I’m here with Mike Garry. Mike is a financial advisor and a CFP practitioner and the founder and the CEO of Yardley Wealth Management. He is also an estate planning lawyer, and his law firm is Yardley Estate Planning. Hey, Mike.

Mike: Hey, Madison. How are you?

Madison: I’m good. How are you?

Mike: I’m good.

Madison: Good, good. So, as we head into 2026, we wanted to take a step back and look at what shaped 2025, from the new tax legislation to shifts in trade and energy policy, plus the broader economic picture that’s setting the stage for the year ahead.

Mike: Maddie, it really was a year of significant change. The One Big Beautiful Bill, the OBBBA, introduced some of the most notable tax updates we’ve seen in years.

Madison: Absolutely. So today I’ll be asking Mike to help us break down what these changes mean for you, your family, and your business as we look toward planning for 2026. Mike, let’s start with the OBBBA. What were the most important updates people should know about?

OBBBA (One Big Beautiful Bill) Overview

Mike: I think a big one is that many provisions from the 2017 Tax Cuts and Job Act were made permanent. The bill also introduced updates meant to simplify planning and stimulate growth.

Standard Deduction Increase

Madison: I know the standard deduction increase got a lot of attention, can you walk us through that?

Mike: Sure. You know, the standard deduction now is $15,750 for single filers and $31,500 for joint filers, and both are indexed for inflation. So, those are big numbers, I mean, that is a lot. You know, if you want to compare that from a few years ago, it’s like double what it was. And what that means is many fewer people need to itemize. Right. Because they just take the standard deduction and they pay less tax that way. And so, this gives households more predictability and greatly simplifies tax filing.

Senior Bonus Deduction

Madison: There was also something called the “senior bonus” deduction, right?

Mike: Yep. A temporary $6,000 deduction for Americans age 65 and older, available through 2028, with income limits. It’s a modest but meaningful benefit that’s worth including in multi-year planning.

Business Provisions & Incentives

Madison: And what about business owners? Anything significant for them?

Mike: Quite a bit. You know, the bill made 100% bonus depreciation permanent and maintained the 20% Qualified Business Income deduction. Both are strong incentives for reinvestment, especially for equipment-heavy businesses.

SALT Cap Increase

Madison: And the SALT cap changed too?

Mike: Yep. SALT cap increased from $10,000 to $40,000, with phaseouts for high earners. It’s another way the bill attempts to give taxpayers more flexibility while encouraging spending and investment. You know, it’s kind of walking back the limit that was placed because the blue states tend to have more, states with higher income tax, so, people who were hurt by this were mostly, New York, New Jersey, California residents.

Estate & Gift Planning Changes

Madison: So overall, it sounds like we have more predictable tax environments, at least for now.

Mike: Exactly. But predictability also means it’s important to review strategies early in 2026 to make sure you’re taking full advantage of the current rules.

Madison: Alright, so, the OBBBA didn’t just impact income taxes. What changed around estate and gift planning?

Mike: Saw a major shift. We now have a permanent federal exemption of $15 million per person, or $30 million for married couples. And that’s indexed for inflation starting in 2026.

Madison: That’s huge. But you always remind clients that “permanent” doesn’t always mean forever.

Mike: Exactly. Future legislation could absolutely bring these levels down. If there’s one thing we know for sure is they’re going to change the tax rules. That’s why now is a unique window for strategies that take advantage of the elevated exemptions.

Madison: What kind of strategies are getting the most attention?

Mike: So, we’re seeing strong interest in things like Spousal Lifetime Access Trust (SLATs) GRATs, and Dynasty Trusts, all designed to lock in these higher exemptions. Coordinating with your estate attorney and CPA ensures these strategies are efficient and compliant.

Madison: And state taxes still matter too, right?

Mike: They always do. Several states still have their own estate or inheritance taxes, so state-level planning remains essential.

Trade & Energy Policy Shifts

Madison: Outside of tax changes, 2025 brought a lot of policy movement in trade and energy. Can you talk about what changed?

Mike: Sure. The administration declared a “national energy emergency,” which expanded domestic production and eased permitting rules for fossil fuel projects. It sparked debate, some see increased energy independence, others see a step back from environmental priorities.

Madison: And there were new tariffs as well?

Mike: Yes, tariffs on autos, steel, pharmaceuticals and other imports. They created short-term volatility, but they also pushed companies to bring more manufacturing back to the U.S.

Madison: So a short-term shakeup for what could be long-term opportunity?

Mike: Well, yeah, maybe. Who knows? I mean, we’re already seeing some new domestic projects in advanced manufacturing infrastructure. But then, you know, in other places, they’ve stopped domestic manufacturing. So I think it’s a mixed bag, really try to figure things out. And, you know, it’s really important to try to keep perspective as the policies continue to evolve.

2025 Market & Economy Recap

Madison: Alright, so despite all these changes, the markets held up pretty well in 2025. What stood out to you?

Mike: So, the S&P500 finished up around 15%, and the NASDAQ gained nearly 18%. We also saw the funds we use for foreign investments went up a lot, like 40%. And the fund FRDM that we’ve used for emerging markets was up over 50%, I think. Or it was up 50%, like through January at some point compared to a year earlier. It was up a whole lot. You know, tech, especially AI related companies, continue to lead. But even fixed income saw improvement as inflation eased.

Madison: And the economy itself held pretty steady too?

Mike: Yes, we saw 3.8% GDP growth in the second quarter, the strongest since 2023. Inflation dropped around 2.9%, and unemployment stayed below 4%. Headlines were dramatic, but fundamentals remain solid.

Major Forces to Watch in 2026

Madison: So as we look ahead, what are the major forces to watch in 2026?

Mike: Yeah, unfortunately, it’s the big ones, right, trade agreements, interest rate policy, and the midterm elections.

Madison: And how might those influence the economy?

Mike: Well, trade negotiations will affect inflation and consumer prices. Economists expect slower GDP growth, around 1.7%, and likely rate cuts totaling around 0.75% through the year. But you know, you really never know what’s going to happen with those.

Madison: And of course, election year volatility always comes up.

Mike: Yep. Historically, markets tend to focus more on economic data than politics over time. But policy can move market short-term, you know, usually, usually fundamentals drive long-term outcomes.

Closing Remarks

Madison: Alright, Mike, so as 2026 begins, it’s a great time to make sure your financial and tax plans reflect the latest changes, from tax law updates to estate strategies and shifting economic conditions.

Mike: And collaboration really is key. The best outcomes tend to come when your financial advisor, CPA and attorney are working together to ensure nothing gets overlooked.

Madison: If 2025 taught us anything, it’s that preparation and flexibility matter.

Mike: Absolutely. Thank you all for joining us and we’ll keep sharing updates and insights throughout the year ahead.

Madison: For more information on Yardley Wealth Management or Yardley Estate Planning, you can visit our websites at yardleywealth.net and yardleyestate.net. You can also follow us on socials at Yardley Wealth Management. Don’t forget to subscribe to our YouTube channel. This podcast has been produced by Madison Demora and Mike Garry with technical and artistic help from Poe Productions.