Donald Trump’s return to the White House following his 2024 election win brings potential shifts to U.S. tax policies, likely affecting both individual and corporate taxpayers. Central to his agenda is the full extension of the 2017 Tax Cuts and Jobs Act (TCJA) provisions, which delivered widespread tax cuts and remains a core part of his economic approach. Yet, given rising budgetary pressures, the impact of Trump’s proposed tax policies could vary significantly across income brackets, businesses, and wealth management strategies. Here’s what to expect—and how to start preparing.
The TCJA’s Tax Cuts and Expiring Provisions: A Critical Priority
The 2017 TCJA lowered tax brackets, doubled the standard deduction, expanded the child tax credit, and increased the estate tax exemption. Without intervention, these cuts are scheduled to sunset in 2025, which would bring higher tax rates for more than 60% of Americans, as estimated by the Tax Foundation. Trump has made it clear that extending these tax breaks is a top priority to avoid a rollback to pre-2017 levels, which could add financial strain to American families and businesses.
If extended, taxpayers would continue to benefit from the increased standard deduction, reduced corporate tax rates, and elevated estate tax exemption, potentially saving families and businesses billions annually. However, the estimated cost of full extension stands between $3.5 trillion and $4 trillion over the next decade—a substantial budgetary consideration. With the deficit reaching over $1.8 trillion in 2024, Trump’s administration will need to find ways to balance fiscal discipline with maintaining the TCJA’s tax benefits.
Proposed New Tax Measures and Congressional Uncertainty
Beyond the TCJA, Trump has proposed additional tax ideas aimed at relieving burdens on specific taxpayer groups, including:
- No tax on tips and ending taxes on Social Security benefits for seniors, which would ease financial strain on lower-income and elderly Americans.
- Exempting overtime pay from taxation to allow workers to keep more of their earnings.
- Creating a deduction for auto loan interest and potentially implementing universal tariffs on imported goods to strengthen domestic industries.
While these measures align with Trump’s “pro-business, pro-worker” agenda, most would require Congressional approval. Republicans do control both houses, but nothing is certain in politics.
Budget Deficits, Interest Rates, and Policy Constraints
Unlike 2017, the current economic environment features elevated interest rates and a significantly larger budget deficit. In 2024 alone, the federal budget deficit hit $1.8 trillion, driven by higher spending and a slow revenue recovery post-pandemic. Erica York, a senior economist at the Tax Foundation, notes that “the budget math is a lot harder this time around,” making it difficult for Trump to enact cuts without triggering financial repercussions. Rising interest rates further complicate the landscape, as they increase government borrowing costs.
These factors could slow or limit Trump’s tax policy agenda as his administration balances tax relief with fiscal stability. With a tight fiscal environment, high-net-worth individuals, corporations, and those with significant assets should be prepared for potentially contentious negotiations and possible compromise tax measures.
Estate Planning and Wealth Transfer: What’s on the Horizon?
The TCJA’s increased estate tax exemption, currently over $12 million per person, faces an uncertain future. If Congress doesn’t act, it will revert to roughly $6 million at the end of 2025, exposing more estates to the federal estate tax. Trump’s re-election opens the door to a potential extension, allowing families to continue planning their wealth transfer strategies under favorable conditions. Wealthy individuals should consider using gifts to trusts or other vehicles to preserve the current high exemption before potential legislative changes. We do advise our clients to wait untill well into 2025 to make these gifts, to gain better certainty as to what will happen to the exemption.
There are some planning approaches that will allow taxpayers to be ready to move with making gifts into trusts at the last possible moment. We do encourage all clients to move their wealth out of their individual names and into the LLCs. It may be much easier to gift and transfer LLC interests than other assets. By taking proactive steps, families can lock in the existing exemption rate and avoid a significant tax hit on their estates.
Additionally, Trump’s proposed elimination of taxes on Social Security and overtime earnings could benefit many middle-income households, easing the tax load on retirement and labor income. Still, due to legislative hurdles, asset owners should work with financial advisors to prepare for different scenarios.
How Aliant Can Help You Navigate These Changes
In light of these expected tax shifts, Aliant’s tax and estate planning team stands ready to support clients with strategies tailored to this evolving landscape. We are committed to helping our clients structure assets in tax-efficient ways, anticipate legislative changes, and capitalize on current exemptions while mitigating risks.
Our services include:
- Estate and Wealth Transfer Planning – Developing strategies that enable families to maximize the estate tax exemption, manage charitable giving, and establish family trusts for future tax efficiency.
- Business and Personal Income Tax Planning – Offering expert guidance on aligning business operations, income, and investments with potential changes to individual and corporate tax rates.
- Cross-Border Tax Strategy – Helping multinational families and companies optimize global tax structures, navigate new compliance demands, and stay ahead in a complex international tax environment.
With Aliant, you’ll have a partner who not only understands the intricacies of tax and estate law but also brings the insight necessary to adapt to shifting regulatory landscapes. We’re dedicated to helping you protect your assets, secure your legacy, and plan for sustainable growth—no matter how the tax code changes in Washington.
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