What will the tax landscape look like with President Trump back in office? Here are a few highlights of what to expect:
Permanent Extension of the Trump Tax Cuts
During President Trump’s first term, the standard deduction doubled, child tax credits were expanded, tax brackets were lowered, the individual health coverage mandate was eliminate (although some states, such as New Jersey have their own mandate), personal exemptions were eliminated, the estate tax exemption was doubled, and the corporate tax rate was changed to a flat rate of 21%.
These changes are expected to either become permanent or extended.
Elimination of Taxes on Tips and Social Security
No taxes on tips would benefit those who work in the hospitality industry, and effectively become an increase in pay. Historically, social security wasn’t ever taxed until 1984.
Housing Affordability
Tax incentives for first-time homeowners. Trump did not provide an amount, but there was a credit from around the year 2008 that was $8,000.
Tariffs
Tariffs would be assessed on foreign goods that are imported into the U.S., with higher tariffs on imports from China.
I just hope that whatever changes are made are not put into place at the last minute to prevent a tax filing nightmare during tax season. This has happened many times before in the recent past.
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