Will a Second Trump Term Change Your Tax Refund? How To Prepare For Next Year Now
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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This year, as people prepare to file their tax returns, hoping for a tax refund, many taxpayers are waiting to see if President Donald Trump will enact or support any legislation that might improve their tax statuses.
On the campaign trail, Trump promised to maintain the tax cuts that came from the 2017 Tax Cuts and Jobs Act (TCJA), which sunset this year, as well as new promises, such as cutting taxes on tips and Social Security benefits.
Will Trump’s second term change your tax refund?
Why a Bigger Tax Refund Isn’t Always a Win
First of all, Mark J. Kohler, an attorney, CPA and senior partner at KKOS Lawyers, suggested that many U.S. taxpayers have a misplaced focus on getting a tax refund. “If you are getting a refund, you overpaid the IRS during the year, and they’re giving you back your money — an interest-free loan,” Kohler said.
Instead of aiming for a large refund, Kohler advised taxpayers to focus on strategies that reduce their tax liability throughout the year. “Our number one cost in life is taxes. If we can minimize that, we can deploy that money in other areas that make us money. That’s the concept of tax planning.”
What Could Change Under a Second Trump Term?
During his first term, Trump’s TCJA introduced several tax breaks, particularly for small-business owners. Now, Kohler noted, Trump has promised to maintain some TCJA provisions and introduce new tax breaks, including:
- Eliminating taxes on tips, Social Security benefits and overtime pay
- Extending past tax cuts for businesses and individuals
- Preventing automatic tax rate increases set for 2026
Kohler emphasized that with a Republican-controlled Congress, tax cuts are highly likely. “The House and Senate have already said, ‘We’re going to pass this,'” he explained. “They’re already in a joint committee figuring out what those tax savings will look like.”
How Will This Impact Your Paycheck and Refund?
If Trump’s tax policies take effect, every American would see tax savings — but that doesn’t necessarily mean a bigger refund. Your employer’s withholding will remain the same, but the IRS may update withholding tables, which could increase take-home pay in real time rather than at tax filing season. Depending on whether the IRS adopts new tax brackets, you could receive a large refund next year when everyone files 2025 taxes in April 2026, Kohler said.
“They’re going to call ADP, Paychex and other payroll processors and say, ‘Guess what? The effective tax rate is now down.'”
If no action is taken on tax legislation, some tax breaks are scheduled to increase in 2026 — but Kohler is confident that won’t happen. “We already know if we pass this [legislation], we’re going to have lower tax rates for every class of person. The whole table is adjusted by 2% to 4%. That’s a big deal.”
A Smaller Refund Could Net More Money in Hand
When taxes go down, returns don’t always get bigger, but your paycheck might, according to Ali Zane, CEO and credit consultant with Imax Credit Repair.
“A lot of people were shocked when they got smaller tax refunds in Trump’s first term. This was because tax rates had changed, which caused their paychecks to go up a little.” So pay attention to your withholdings. And remember, a smaller refund isn’t a bad thing — it means you kept more of your income.
Your Refund Could Come More Slowly
Trump did issue an executive order to the IRS to terminate probationary employees, according to the New York Times, which could add up to as many as 6,000 job cuts. It is possible, though not a guarantee, that this could slow the time it takes to process your refund.
Additionally, Zane said, “Trump has cut money to the IRS in the past, which caused people with lower incomes to have their tax returns held up and missed checks sent to them.”
If he does that again, she warned that people who get the earned income tax credit (EITC) or the child tax credit will have to wait longer to get their money back.
What Should You Do To Prepare?
With potential tax cuts on the horizon, Kohler advised taxpayers to be proactive:
- Adjust your withholdings to avoid giving the IRS an interest-free loan.
- Monitor tax policy changes — if cuts pass, you might want to adjust financial plans.
- Plan for tax-efficient savings by investing money you save on taxes.
Ultimately, Kohler reminded taxpayers that focusing on year-round tax savings is better than chasing a large refund. “You don’t want a big refund — you want your money now, in your paycheck.”
Taxpayers should stay informed and plan ahead to maximize their financial benefits under any new tax laws.
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