Trump’s tax plans: Here’s what to expect for your taxes in 2025 and beyond

By Kemberley Washington CPA Bankrate com From extending the tax cuts he signed into law in to ending taxes on tips overtime pay Social Guard benefits and more President Donald Trump has never made a secret of his goal to make sweeping changes to the U S tax code Related Articles An AI avatar tried to argue a situation before a New York court The judges weren t having it Chevron ordered to pay more than million to restore Louisiana coast in landmark trial Congress has the power to halt Trump s tariffs But Republicans aren t ready to use it AI vs pro gambler s million March Madness bet coming down to Duke and Houston Wedding guest advance Minimizing costs to make it work During his first stint in office Trump massively overhauled tax law by passing the Tax Cuts and Jobs Act or TCJA of Now countless of those tax provisions are set to expire at the end of leaving an opportunity for the president to extend and potentially expand his tax initiative agenda We re seeking permanent income tax cuts all across the board and to get urgently needed relief to Americans hit especially hard by inflation Trump announced during his formal address to Congress in March Republicans in Congress are at present doing all they can to turn Trump s agenda into reality Senate Republicans on Wednesday unveiled a comprehensive tax guidelines proposal that would permanently extend the tax cuts enacted in the TCJA plus add new tax cuts worth about trillion including eliminating taxes on tips and overtime pay The cost of extending the TCJA alone adds up to about trillion in lost leadership revenue over years according to a record by the Committee for a Responsible Federal Budget a nonpartisan nonprofit research group In February the House of Representatives passed a budget blueprint that calls for trillion in tax breaks and trillion in spending cuts to soundness care and other programs Now the question is whether Senate and House Republicans can manage to come to agreement on a comprehensive tax cuts bill While Republicans hold a slim majority in Congress there are debates even within the party about how to pay for tax cuts amid concerns about a growing U S deficit and massive prospective cuts to essential programs such as Medicaid How tax laws may change While it s unclear what the final law will look like it seems likely that various type of tax-law overhaul will happen this year Under the TCJA key changes were made to individual tax laws including the near-doubling of the standard deduction and increasing the child tax credit to from Plus the top tax rate for high-income earners was reduced to from and a new deduction was created for certain types of business income While specific of the TCJA s provisions were permanent and others are set to expire at the end of U S lawmakers can include just about any tax provision they want in a new comprehensive tax bill assuming they can get it passed As a product along with the possibility of extending the TCJA s expiring provisions which would effectively maintain the status quo for U S taxpayers there s a decent chance lawmakers will change other tax laws as well Trump has promised a variety of tax breaks both during his campaign and now as president including Eliminating taxes for people who earn less than Removing the current cap on the deduction for state and local taxes Eliminating taxes on tip income overtime pay and retirees Social Assurance benefits Creating a tax deduction for car loan interest payments for American-made cars Here are additional tactics your taxes may change in and beyond Tax benefits for small businesses The TCJA lowered the corporate tax rate for businesses to a flat from a graduated system that had a top rate of That change was made permanent and isn t part of the TCJA s expiring provisions though just about any tax law is potentially subject to lawmakers modifications But the TCJA also offered a major tax break to pass-through businesses such as partnerships S-corporations and sole proprietors If those businesses meet income limits and eligibility requirements they can deduct of their qualified business income or QBI a major tax benefit for businesses that qualify That provision is slated to expire at the end of While there is bipartisan encouragement to extend the QBI deduction also known as the Section A deduction it s unclear at this point what will happen Plus pass-through businesses where business owners analysis income on their personal tax return and pay individual income tax rates on that income also benefit from the TCJA s lower marginal tax rates Jan Lewis a certified inhabitants accountant and partner with BMSS Advisors and CPAs in Ridgeland Miss says small-business owners would appreciate it if Congress extended the TCJA provisions such as the qualified business income deduction Lewis says the certainty of having the laws in place for several years rather than constant change would be welcome news Selected business owners may feel better about investing in their businesses and local economies with an extension of TCJA Lewis says State and local taxes SALT cap To pay for the cost of TCJA lawmakers eliminated personal exemptions which were a way for taxpayers to reduce their taxable income and capped the amount taxpayers could claim for the state and local tax SALT deduction at The SALT deduction lets taxpayers write off their property taxes plus their state and local income or sales taxes On the campaign trail Trump suggested he required to remove the SALT limit Meanwhile other ideas as of now being floated by lawmakers include raising the cap to from or doubling the amount for couples who are married filing jointly The current cap applies to all filing statuses including single filers and those married filing jointly the exception is those who are married but file separately for whom the cap is Of class removing the cap or even increasing it would raise thorny questions about how to fund the extension of other elements of the TCJA Repealing the SALT limit would be taking away particular of the revenue to pay for other TCJA reforms Lewis says Other proposed tax breaks Trump also revealed on the campaign trail that he wants to eliminate taxes on certain types of income No tax on Social Safety benefits Seniors should not pay tax on Social Protection Trump explained on his social media site Truth Social in July Certain retirees owe income tax on Social Safeguard benefits if they receive income from other sources that pushes them over the Social Defense Administration s income thresholds Those with low to modest income typically don t pay taxes on Social Assurance benefits No tax on overtime pay In September Trump proposed eliminating taxes on both overtime pay and tip income Although Trump has not provided additional details of how the plan would work the Tax Foundation a nonprofit tax framework organization declared that eliminating taxes on overtime pay could distort the labor force That is workers might take on more overtime jobs because those would be more attractive than salaried positions that are exempt from overtime rules No tax on tip income Trump provided limited details for eliminating taxes on tip income But Republication lawmakers in the U S House and Senate have introduced companion bills that outline a tax deduction of up for tip income Read more Tax deductions How they work how to claim them A tax deduction for interest paid on car loans The details were vague but in a speech to a joint session of Congress on March Trump explained I also want to make interest payments on car loans tax deductible but only if the car is made in America Tax on U S expatriates income In October Trump stated he supports reducing taxes on U S citizens who live abroad At this time expatriates are subject to tax on their income despite living outside the U S and are required to follow the same rules as taxpayers who live in the U S As such expats must summary all taxable income and pay taxes in accordance with U S tax law That disclosed a good portion of foreign income in for qualified single filers and for qualified married-filing-jointly filers can be excluded from U S taxes Plus there s a tax deduction to offset expats housing costs However even expatriates who qualify for the foreign earned income exclusion and other tax benefits must file a U S tax return Tariffs and the External Revenue Function Since taking office in January Trump has embraced tariffs including announcing a minimum tariff on all goods imported into the U S plus reciprocal tariffs on numerous countries on top of tariffs on all car and car part imports tariffs on all products from any country that imports Venezuelan oil tariffs on certain products from Canada and Mexico and more Relatedly in January Trump revealed on Truth Social that he would create an External Revenue Organization to collect tariffs duties and revenues from foreign sources Generally U S companies that buy foreign goods pay import tariffs to the U S ruling body Research has shown that consumers often end up footing the bill for higher tariffs The implementation of tariffs had an impact on small businesses over the years as plenty of U S businesses rely on goods imported from other countries says Brandi M Samuel a certified population accountant and international tax principal at Windham Brannon LLC in Atlanta In addition to the impact on small businesses customers who purchase these goods are likely to also experience financial strain under tariffs Samuel says Bankrate com Distributed by Tribune Content Agency LLC