I’m an Accountant: 3 Changes I Anticipate Coming to Your Taxes If Trump Wins in November
Written by
Angela Mae
Edited by
Gary Dudak
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Election Day is November 5, 2024, which means the American people still have a little time to decide who to vote for. Of course, the two main candidates are Donald Trump for the Republican party and Kamala Harris for the Democrats, but RFK Jr. is also still in the mix.
While Harris is a more recent addition to the presidential candidacy, Trump has already served a term in office. It’s still too soon to say for certain what’ll happen if Trump gets elected for a second time, but many voters are trying to figure out how he might impact their taxes going forward.
GOBankingRates spoke with Christian Putnam, CPA and CEO of Augur CPA, an accounting and tax firm based in the Washington, D.C. area with clients across the U.S., about how a second Trump presidency might impact the people’s taxes.
Although only time will tell, here’s what he said could happen.
Changes to the Tax Cuts and Jobs Act of 2017
During his first term in office, Trump signed the Tax Cuts and Jobs Act (TCJA) into law. The TCJA was a major overhaul of the tax code at that time. It impacted both business owners and individual taxpayers, but in different ways — mostly through tax cuts.
Here are some of the key tax-related changes the TCJA brought for brought for businesses:
- Created new deductions for pass-through entities’ qualified business income
- Cut corporate tax rate from 35% to 21% starting in 2018
- Eliminated or reduced various business taxes and expenditures
- Lowered deductibility of net interest in businesses
And these are some of the key changes for individuals:
- Lowered individual income tax rates for all but two income brackets (the 10% and 35% brackets remained the same)
- Increased the standard deduction to $14,600 in 2024 for single filers (and $29,000 for married couples filing jointly)
- Limited or removed certain deductions, including the personal exemption, and some itemized deductions (including the mortgage interest deduction and the state and local tax deduction)
- Raised the Child Tax Credit from $1,000 to $2,000 (and increased the eligible income threshold from just $110,000 to $400,000)
- Eliminated the tax penalty for not having health insurance
The majority of these individual-based changes are set to expire at the end of 2025. The business-related changes are more permanent.
“If Trump wins the presidency, it’s likely that the Republican tax bill from 2017 gets extended with few or no changes,” said Putnam.
This does seem plausible considering it was Trump who initially got the TCJA passed. The act was also primarily supported by the Republican party as opposed to the Democratic party.
State and Local Tax Deduction (SALT) Changes
The state and local tax (SALT) deduction is geared toward individual taxpayers who prefer to itemize their deductions — and can benefit from doing so. With this deduction, individuals can deduct up to $5,000 (or $10,000 if married filing jointly) from the sales, property or income taxes they’ve already paid to local or state governments.
Before 2018, there wasn’t a limit on these itemized deductions. The SALT deduction also only applies to the 2018 to 2025 tax years and is set to expire after December 2025. Still, Putnam predicts there won’t be any immediate changes if Trump is elected.
“It’s also unlikely that the $10,000 deduction limit for state and local taxes gets changed since this is not a Republican political priority,” said Putnam.
In this case, it might be more of a waiting game. Those filing for the 2024 and 2025 tax year can still take advantage of the SALT deduction. After that, the deduction may simply disappear on its own.
Inflation Reduction Act of 2023 Changes
Under the Biden-Harris administration, one of the biggest legislation changes was the Inflation Reduction Act of 2023. Among other things, here’s how this act has impacted the American society:
- Modified and extended the clean energy Investment Tax Credit to give qualifying investments (such as those in wind, solar, and other renewable energy projects) a 30% credit
- Introduced a bonus credit of 10% (maximum) for qualifying clean energy projects in low-income communities
- Provided $4 billion from the Advanced Energy Project Credit
- Provided $80 billion in additional funding to the IRS over 10 years, primarily to close the tax gap and enforce wealthy earners to comply with tax law
“This funding will likely get reduced if Trump and Republicans control the executive and legislative branches,” said Putnam.
It doesn’t seem likely that the IRA will be fully repealed. However, Trump has previously expressed opposition to it, so there could be some changes.
Changes Aren’t Entirely Dependent on the Current President
Although the U.S. president certainly has an effect on taxes — both individual and corporate — they’re not the only factor. Tax legislation originates in the legislative branch, said Putnam. What this means is that any changes to tax law will mainly depend on who controls the Senate and the House, regardless of whether Trump is elected.
That said, a Trump presidency could bring about changes to the Inflation Reduction Act of 2023. It may or may not have much of an effect on the Tax Cuts and Jobs Act of 2017 or the current deduction limit for local and state taxes.
For right now, the people will have to wait, keep an eye on any proposed changes to tax law, and cast their votes when the time comes.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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