Preparing Your Finances for 2027 Tax Changes

What Investors and Retirees Should Review Before Year-End

The One Big Beautiful Bill made several tax provisions permanent, which gives investors and retirees more certainty for long term planning. According to David Theiss, CPA, CFP®, VP and Senior Wealth Management Advisor at Croghan Colonial Bank, the third quarter is a good time to revisit a few provisions before filing for 2027.

Standard deduction and tax brackets are locked in

The higher standard deduction, the elimination of personal exemptions and the current tax brackets were all made permanent and indexed for inflation. That means these figures will continue to expand slightly each year rather than reverting to prior law, giving investors a more stable baseline for financial planning.

More room to itemize with the higher SALT cap

The state and local tax deduction cap increased to 40,000 dollars, up from 10,000. Combined with mortgage interest, this may bring itemizing back into play for people who had shifted to the standard deduction in recent years.

A new deduction for retirees

Taxpayers age 65 and older can now claim a senior deduction of up to 6,000 dollars, or 12,000 dollars for joint filers, with income based phase-outs.

“That gives somebody an opportunity to look at that deduction if they’ve ever considered doing Roth conversions,” Theiss said. “The idea is to convert only so much that you preserve the deduction, since it does phase out.”

A new deduction for new vehicle purchases

Taxpayers can deduct up to 10,000 dollars in loan interest on a new vehicle, capped at the actual interest paid. The deduction applies for four years and does not require itemizing, though the vehicle must be new with final assembly in the United States.

A new option for charitable giving without itemizing

Taxpayers who give but don’t itemize can now claim an above the line charitable deduction of up to 1,000 dollars for single filers or 2,000 dollars for joint filers, similar to the temporary provision under the CARES Act.

Is it time for a full financial plan review?

Beyond the tax specifics, Theiss said Q3 is a good time to consider a broader financial plan review, especially for anyone who has never had one.

“The technical part is the easy part, gathering a list of assets, liabilities, investments and income,” he said. “The harder part is figuring out where someone wants to go in life and what’s important to them, whether that’s family or charity.”

He recommends starting with an honest conversation about goals before getting into the numbers, and finding an advisor you trust since you’ll be working together on major decisions for years to come.

Croghan’s wealth and investment management team is available to help you review these changes ahead of tax season. Contact us to schedule a conversation with your Croghan advisor.

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