11 Potential Tax Changes Under A Trump White House, #230
What could a Trump White House and Republican-controlled Congress mean for your finances? In this episode, we break down the potential tax changes—from individual tax brackets to business deductions and state taxes—that could impact your bottom line. Tune in to understand the areas with low, moderate, and high potential for change and what steps you should consider if you live in a high-tax state.
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[1:19] Sign up for my weekly newsletter
[2:28] Area of low potential for changes
[4:25] Area of moderate potential for changes
[10:05] Area of high potential for changes
[14:18] What to do if you’re in a high-tax state
Areas of low potential for change
While some aspects of the tax code may shift, these areas are expected to stay largely stable:
Individual Tax Brackets: Unlikely to change, as we’re still under the 2017 tax cuts that will expire in 2025. Any adjustments would likely account for inflation.
Standard Deduction: Increased significantly in 2017, this deduction for single and married filers is expected to remain unchanged.
Estate Tax Exemptions: The federal estate tax limit is currently $13.6 million per individual, meaning no federal income tax applies below this threshold. Inheritances over this amount remain taxed at 40%.
Areas of moderate potential for change
These areas are more likely to see revisions under a Trump White House:
Itemized Deductions: The ability to deduct investment advisor fees, removed in recent years, might return—benefiting those paying out of pocket for financial planning.
Child Tax Credits: Republicans may lower the qualifying threshold for the credit but could increase the maximum amount.
Alternative Minimum Tax (AMT): More high-income earners may trigger the AMT, requiring them to add back deductions and pay taxes at a higher rate.
Section 199A Deduction: Small business owners could continue deducting 20% of business profits, with the potential for this percentage to increase.
Other Business Deductions: Immediate expensing for research and development costs could expand, and bonus depreciation might make a comeback.
Tax on Tips, Overtime, and Social Security: Trump has proposed eliminating these taxes. However, Social Security income under $24,000 (or $34,000 for joint filers) is already untaxed.
Areas of high potential for change
Significant shifts could occur in these areas, affecting tax credits and deductions:
Green Tax Credits: Credits for solar panels, energy-efficient upgrades, and electric or hybrid vehicles (currently $7,500) may be eliminated. If you want to take advantage of these, act before the end of 2024.
SALT Deduction Cap: SALT is what you can deduct on your tax return when you live in a high-tax state. Historically, you could add up how much you’ve paid in property tax and income tax and use it to itemize your taxes. The cap on state and local tax deductions could be raised or adjusted for inflation. This would be particularly impactful for residents of high-tax states who rely on SALT deductions to exceed the standard deduction.
What should you do if you're in a high-tax state? Listen to learn more.
Resources Mentioned
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