1. Extending the Tax Cuts and Jobs Act (TCJA) Provisions for Individuals
The TCJA introduced significant tax cuts in 2017, and many of these provisions are set to expire after 2025. President Trump’s recent policy stance suggests a priority to make these individual tax cuts permanent, which could mean continued benefits for many taxpayers, especially those in middle to high-income brackets. Some key areas that could be impacted if the
TCJA provisions are extended include:
• Itemized Deductions: This could mean the ongoing suspension of certain itemized deductions, including the phase-out of the deduction limit for specific items, as well as limitations on deductions for personal casualty losses.
• Charitable Contributions: The increased percentage limit for cash contributions to public charities (from 50% to 60%) may remain.
• Home-Related Deductions: The qualified residence interest deduction could see changes, with limits on home equity interest deductions continuing.
• Student Loan Assistance: Extended provisions could retain exclusions for certain student loan discharges and employer-provided student loan assistance, helping borrowers manage debt with some tax relief.
2. Eliminating the SALT Cap
Trump’s new policy proposals include a complete removal of this cap, allowing taxpayers to deduct the full amount of their state and local taxes from their federal taxable income.
3. Business Deductions Restored
For business owners, several deductions that have been phased out or limited may make a comeback:
• 100% Bonus Depreciation
• R&D Expensing
• Interest Deduction (EBITDA-Based)
4. Additional Potential Deductions and Credits
Several additional provisions aim to provide taxpayers with more deductions and credits, such as an auto loan deduction and enhanced employer benefits, including tax-free student loan payments. These provisions could provide relief for specific spending areas and reduce taxable income for certain taxpayers.
Start Planning Now for Potential Tax Changes
Navigating tax policy changes can be complex, but proactive planning can make all the difference in maximizing benefits and minimizing liabilities. Please reach out to us and we can assist with any questions you have.
