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5 days ago

Here's what a Trump presidency could mean for your taxes




Former President Donald Trump has defeated Vice President Kamala Harris to win the White House, which could broadly impact taxpayers — but the details remain unclear, according to policy experts.


Enacted by Trump in 2017, the Tax Cuts and Jobs Act, or TCJA, will be a key priority for the president-elect in 2025. The law brought sweeping changes, including lower tax brackets, higher standard deductions, a more generous child tax credit and bigger estate and gift tax exemption, among other provisions.


Those individual tax breaks will sunset after 2025 without action from Congress, which could trigger higher taxes for more than 60% of taxpayers, according to the Tax Foundation. However, Trump wants to fully extend expiring TCJA provisions.

Trump also floated new ideas on the campaign trail, including no tax on tips, ending taxes on Social Security benefits for older adults and scrapping taxes on overtime pay. He also proposed eliminating income taxes, creating an auto loan interest deduction and tacking universal tariffs on imported goods.


"There are a whole bunch of promises that Trump made during the campaign," and it's unclear how many he will "seriously pursue," said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center.

Plus, most of Trump's tax policy requires Congressional approval, which could be challenging, depending on control of the Senate and House of Representatives and support within the Republican party.


While Republicans secured a Senate majority, control of the House remains uncertain. If Democrats flip the House, we could see "more gridlock" in Congress, which could stall Trump's agenda, Gleckman explained.


Tax negotiations could also be tough amid growing concerns about the federal budget deficit, according to Erica York, senior economist and research manager with the Tax Foundation's Center for Federal Tax Policy. 

"The budget math is a lot harder this time around than it was back in 2017," with higher interest rates and a bigger baseline budget deficit, she said. The deficit topped $1.8 trillion in fiscal 2024. 

Fully extending TCJA provisions could decrease federal revenue by $3.5 trillion to $4 trillion over the next decade, depending on the scoring model, according to the Tax Foundation.  


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