How Trump Tax Reforms Affect You: Expiring Provisions Explained

The Trump Tax Shake-Up is set to dominate the financial planning landscape as the 2024 election results bring new leadership and legislative priorities. With Donald Trump returning to the presidency and Republicans holding control of Congress, the clock is ticking on several key provisions from the Tax Cuts and Jobs Act (TCJA). These provisions are set to expire in 2025, and the resulting tax changes could significantly impact your finances.

At G&S Accountancy, we understand the challenges posed by these looming changes. With careful planning and strategic decision-making, you can stay ahead of the curve and make the most of your opportunities.

Key Expiring Tax Provisions

The Trump Tax overhaul under the TCJA introduced substantial benefits for individuals and businesses. However, unless Congress acts to extend them, these provisions will sunset in 2025, bringing higher tax rates and reduced deductions for many. Here’s what you need to know:

1. Lower Income Tax Rates

The TCJA reduced individual income tax rates to brackets ranging from 10% to 37%. However, these will revert to higher pre-TCJA levels in 2026, with the top rate increasing to 39.6%.

2. Increased Standard Deduction

The nearly doubled standard deduction—currently $27,700 for married couples filing jointly—will drop to pre-2018 levels, reducing the benefit for millions of taxpayers.

3. SALT Deduction Cap

The State and Local Tax (SALT) deduction cap of $10,000 is scheduled to expire, though it remains unclear whether Congress will extend or modify this contentious provision.

4. Estate and Gift Tax Exemption

The estate tax exemption will drop from $13.99 million per individual to approximately $7 million in 2026, exposing more estates to higher taxes.

5. Pass-Through Business Income Deduction

The 20% qualified business income (QBI) deduction under Section 199A will end, impacting small business owners and pass-through entities.

6. Charitable Contribution Limits

The limit for cash charitable contributions will return to 50% of adjusted gross income (AGI), down from the current 60%.

Without proactive planning, these changes could result in higher taxes for many households and businesses.

Strategic Opportunities to Plan for the Trump Tax Changes

While the Trump Tax shake-up presents challenges, it also creates opportunities to plan strategically. Here’s how G&S Accountancy can help you capitalize on these changes:

Income Timing Strategies

• Accelerating income into 2025 can help you lock in the current lower tax rates before they revert to pre-TCJA levels.
• For example, you could realize bonuses, sell investments, or convert traditional IRAs into Roth IRAs before the higher rates apply.

Charitable Giving

• Maximize deductions by making large charitable contributions before the limit drops to 50% of AGI.
• Donor-advised funds can be a useful tool to align contributions with your long-term goals.

Estate Planning

• With the estate tax exemption set to drop by nearly 50%, now is the time to transfer assets or create trusts to minimize estate tax liability.

SALT Deduction Optimization

• Taxpayers in high-tax states like California and New York should evaluate the timing of property tax payments to maximize benefits under potential rule changes.

Maximizing QBI Deduction

• Small business owners can work with us to fully utilize the Section 199A QBI deduction before it expires, potentially saving thousands in taxes.

Why Choose G&S Accountancy?

Navigating tax changes like the Trump Tax shake-up can be complex. At G&S Accountancy, we’re here to make it easy for you:

• Personalized Tax Planning: Our tailored strategies help you optimize savings based on your unique financial situation.
• Proactive Guidance: We stay ahead of legislative developments, ensuring you’re prepared for what’s coming next.
• Comprehensive Services: From individual tax returns to estate and business planning, we’re your trusted partner for all things tax-related.

Don’t Wait to Act

The 2025 expiration of key provisions under the Trump Tax cuts may seem far off, but early planning is critical to maximize benefits. By taking action now, you can position yourself for success no matter what changes lie ahead.

📞 Contact G&S Accountancy today to schedule a consultation. Let us help you navigate the Trump Tax shake-up and secure your financial future with confidence.

Frequently Asked Questions

What are the Trump Tax cuts, and why are they expiring?

The Trump Tax cuts, part of the TCJA passed in 2017, introduced lower tax rates and increased deductions. These provisions were designed to sunset in 2025 unless Congress takes action to extend them.

How will the Trump Tax changes affect small business owners?

The expiration of the Section 199A deduction will result in higher taxes for many pass-through businesses. Planning ahead can help mitigate these impacts.

What steps can I take to prepare for expiring tax provisions?

Work with a tax professional to explore strategies like income acceleration, estate planning, and charitable giving. Start early to maximize the benefits of the current laws before they sunset.