President Trump’s future tax proposals are making headlines with plans to reduce tax burdens for individuals and businesses while aiming to stimulate economic growth. Here’s what you need to know:
Key Insights
Extension of 2017 Tax Cuts: Proposed to make the lower tax rates and higher standard deductions from the 2017 Tax Cuts and Jobs Act permanent.
Exemptions for Specific Income: Tip income, overtime pay, and Social Security benefits could be exempt from federal taxes, potentially benefiting lower- and middle-income households.
State and Local Tax (SALT) Deductions: Plans to reinstate the unlimited deduction for state and local taxes, removing the $10,000 cap currently in place. This calculation accumulates property tax & state income tax, and has limited the benefit to high income earners who itemized.
Proposals Impacting Businesses
Corporate Tax Rate Reductions: Aim to lower the corporate tax rate from 21% to 20% and further to 15% for companies manufacturing domestically.
Tariffs on Imports: Introduction of a universal tariff on all imports, with a significant 60% tariff on goods from China, to boost domestic production and reduce dependency on foreign markets.
Additional Tax Proposals
Auto Loan Interest Deduction: A new deduction to ease vehicle ownership costs.
Family Caregiver Tax Credit: Support for caregivers in the form of a tax credit to help alleviate financial burdens.
What This Means for You
While these proposals could reduce taxes and encourage growth, they’re not without trade-offs. Extending the 2017 tax cuts alone could increase the federal deficit by $3.4 trillion over the next decade. Plus, these ideas would need Congressional approval, which could lead to changes.
Stay Ahead
At Ascent Tax, we’re monitoring these potential changes closely so you can stay ahead. Understanding how these changes could affect you, whether you’re an individual taxpayer or a business owner, is essential.
Have Questions? Contact Us!
We’re here to help you navigate the complexities of tax changes. Reach out today for personalized advice or to schedule a consultation.