News

You may have seen recent headlines about the new federally sponsored children’s savings accounts known as Trump Accounts. As implementation moves forward, we want to provide a clear overview of what we know so far. 

What is a Trump Account

A Trump Account is a tax‑advantaged custodial investment account established for a minor child. 

The account is owned by the child, with a parent or guardian serving as custodian until age 18, and contributions grow tax‑deferred.

Who Can Have an Account

Most children under age 18 with a valid Social Security number will be eligible to open an account. Additional benefits apply to children born within a specific window (see below).

Who Gets the $1,000 Federal Contribution

Opening a Trump Account includes a one‑time $1,000 federal “starter deposit” for qualifying newborns. Children must meet all of the following:

• Born January 1, 2025 – December 31, 2028
• U.S. citizens with a valid Social Security number
• Have not previously received a pilot or test‑phase contribution

This deposit is funded by the U.S. Treasury and will be made automatically once an account is opened and verified.

Employer Contributions

Some employers may choose to offer Trump Account contributions as part of their benefits package. Availability will vary, and employees should check their HR portal or benefits guide for details.

How Trump Accounts Work

• Contribution limits: Up to $5,000 per year from family or other contributors.
• Access to funds: Withdrawals are restricted until the child turns 18.
• At age 18:
  • The account automatically converts into a traditional IRA, or
  • The beneficiary may take penalty‑free withdrawals for qualified expenses, such as first‑time home purchases or higher‑education costs, consistent with existing IRA rules.
    

How Enrollment Works

Parents or guardians can enroll using IRS Form 4547, either:

• When filing a tax return,
• Through the IRS online enrollment portal, or
• Directly through the official Trump Account website (linked here). 
  

Timing

Enrollment is now open, but the Treasury Department has stated that no contributions — federal or private — will be deposited before July 4, 2026.

Our Perspective

For children eligible for the $1,000 federal deposit, opening an account is likely a straightforward benefit. For families considering additional contributions, or opening an account for a child who does not qualify for the federal deposit, it's worth comparing this option to alternatives such as:

• 529 college savings plans
• UTMA/UGMA custodial accounts
• Future Roth IRAs for working teens
  

Each tool serves a different purpose, and the best choice depends on your long‑term goals.

As always, if you have any questions about these accounts and how they may fit into your plan, don't hesitate to reach out. We'll help guide you through it. 

We’re honored to be included in the Winter issue of Roland Park News!

In the feature article, “The Gift that Gives Back: Aligning Your Generosity with Your Financial Strategy,” Matt Horton, CFP®, shares thoughtful, practical ways to approach charitable giving with purpose and confidence, especially during a season when generosity is top of mind. 

You can read the full article on page 16 at the link below.

Maryland’s new tax laws could affect your 2025 tax bill. Higher income taxes, capital gains surtaxes, and reduced deductions may mean paying more than expected.

If your household earns over $250K, now is the time for proactive financial planning. Combining tax-smart strategies with investment adjustments can help minimize liability and optimize your portfolio.

Schedule a call or meeting today — we’ll help you make tax-intelligent decisions with confidence. 

On July 4, the President signed into law the “Make American Workers and Families Thrive Again Act” (formerly the “One Big Beautiful Bill Act”). This sweeping legislation (over 1,000 pages) modifies, extends, or makes permanent many of the provisions from the 2017 Tax Cuts and Jobs Act, most of which were set to expire at the end of 2025.

Understanding these changes is important for making informed financial and tax planning decisions in the years ahead. As your neighborhood resource for money matters, here are some of the key highlights:

Key Highlights:

Tax Brackets: The 10%, 12%, 22%, 24%, 32%, 35%, and 37% tax rates are now permanent.
Personal Exemption: Permanently eliminated. Seniors 65+ receive a $6,000 deduction (2025–2028), phased out at $150,000 (joint) or $75,000 (single).
Standard Deduction (2025): Increased to $31,500 (joint), $23,625 (head of household), and $15,750 (single), adjusted annually for inflation.
Itemized Deductions: Still available but limited for those in the 37% tax bracket.
SALT Deduction: Cap raised to $40,000 in 2025, increasing 1% per year through 2029, then reverting to $10,000. Phased down for MAGI over $500,000.
Child Tax Credit: $2,200 credit made permanent, with inflation indexing. Phases out at $400,000 (joint)/$200,000 (single).
QBI Deduction: Made permanent for small businesses and the self-employed.
Estate & Gift Tax: Exemption permanently set at $15 million, indexed for inflation.
Alternative Minimum Tax (AMT): Exemptions and phase-outs made permanent.
Mortgage Interest: Deductible on mortgages up to $750,000.
Tip & Overtime Deductions: Above-the-line deductions allowed through 2027, with caps and income limits.
Vehicle Interest Deduction: Up to $10,000 for U.S.-assembled personal-use vehicles, phased out for incomes over $100,000.
Charitable Contributions: Above-the-line deduction of $300 (joint) / $150 (single) through 2029.
Trump Deferred Account: New tax-advantaged savings plan for children born 2025–2028, with $5,000 annual contribution limit, $1,000 government seed, and tax-free growth.
Section 179 Expensing: Limit raised to $2.5 million, with phase-out beginning at $4 million.
Opportunity Zones: Incentives extended through 2033.

What’s Next?

The IRS will release additional guidance in the coming months, as the bill passed quickly without full committee hearings.

If you have questions about how these changes might impact your financial plan, retirement strategy, or tax situation, don’t hesitate to reach out. We’re here to help you align your plan with the new rules and opportunities.

Rowhouse Financial Partners is proud to announce that Matt Horton has earned his CERTIFIED FINANCIAL PLANNER® (CFP®) designation.

This achievement represents a significant milestone and underscores Matt’s commitment to delivering comprehensive, high-quality financial guidance to clients.

Widely regarded as the gold standard in the financial planning profession, the CFP® designation reflects rigorous education, examination, and ethical standards.

The IRS released retirement plan contribution adjustments for 2025. Key highlights include:

• The annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan is increased to $23,500, up from $23,000.¹
  
• The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan remains $7,500 for 2025.²
  
• Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63 who participate in these plans. For 2025, this higher catch-up contribution limit is $11,250 instead of $7,500.³

A full breakdown can be viewed in the chart, as well as on IRS.gov. 

¹ IRS.gov

² IRS.gov

³ IRS.gov

Rowhouse Financial Partners has been recognized as an Elite top-producing wealth management firm of Avantax Wealth Management®, a leader in tax-advantaged financial planning. Only a handful of Avantax’s more than 3,000 affiliate advisory firms achieve Elite status.

“We are honored to be recognized as Elite by Avantax and extend our gratitude to our clients who trust us with their financial planning needs,” said Joseph Palumbo, CPA, CFP®, Partner, and Financial Advisor at Rowhouse Financial Partners. “We look forward to the future of Rowhouse Financial Partners as we celebrate this achievement.”

Daniel Long joins Rowhouse Financial Partners after over 30 years of advising clients on taxes and wealth management.

Long’s financial planning philosophy is built on providing clients with tax-intelligent expertise, guidance, and resources to make informed financial decisions.

Palumbo Financial & Tax Services, a comprehensive financial planning and accounting firm, is proud to announce its new name, Rowhouse Financial Partners.

Marking 20 years in business this year, the rebranding signals the firm’s focus on supporting its evolution and commitment to offering holistic, tax-intelligent financial services to clients throughout the Northeast.