There are $4 trillion of tax increases scheduled to take effect at the end of 2025. But what will a second Trump presidency mean for taxes?

The Tax Cuts and Jobs Act of 2017 introduced significant tax cuts during President Donald Trump’s first term. However, many provisions are set to expire at the end of 2025, which could lead to a “tax cliff” for individuals, families and businesses. Key expiring provisions include:

• Individual Income Tax Rates: Rates were lowered across income brackets thanks to the TCJA—and a return to pre-2017 rates will see a jump in the highest tax bracket from 37% to 39.6%.
• Standard Deduction Increase: The TCJA nearly doubled the standard deduction, simplifying filing for many Americans.
• Alternative Minimum Tax (AMT) and Estate Tax Exemptions: The TCJA raised the income thresholds for the AMT and doubled the estate tax exemption, raising it from $5.5 million to $11.4 million for single filers and $11.1 million to $22.8 million for married couples, adjusted annually for inflation.
• Corporate Tax Rates: One of the most significant changes was the reduction of the corporate tax rate from 35% to 21%.

Trump’s Proposed Tax Plans for a Second Term

While Trump was on the campaign trail he spoke of many ideas for the future of American taxes. Now that he has been re-elected what proposals could be in store?

Strengthening and Making TCJA Provisions Permanent: Trump has stated he wants to make the individual tax cuts permanent to avoid the 2025 tax cliff. In addition, Trump has proposed what amounts to a broadening of the original TCJA, namely:

• A10% tax cut specifically targeted at middle-income households,
• A further reduction to the capital gains tax rate
• Additional cuts to corporate taxes to stimulate business growth and investment.

Additional Cuts to Corporate Taxes: On the campaign trail, Trump proposed slashing the already reduced corporate tax rate of 21% (due to the TCJA) to as low as 15% for companies that make their products in the United States.

Pillar Two: So far the United States has refrained from agreeing to the Global Minimum Tax initiative created by the OECD. Under a Trump presidency, the global tax deal appears in peril. Pillar Two of the Base Erosion and Profit Shifting (BEPS) initiative is aimed at curbing profit shifting and ensuring a fairer tax regime, and is reshaping international tax strategies. While the U.S. was a proponent of the OECD plan, it never passed Congress.

IWTA Provides Guidance and Know-How

Jack Brister and his capable team know U.S. and international tax statutes inside and out. We’re here for a consultation, an evaluation and to serve as a trusted advisor and accounting partner. Whether you call Detroit, Dublin or Dubai your home, if you have investments, business or residences in the USA, we can help.

The upcoming months could see dramatic changes in the tax landscape. Watch this space for breaking U.S. and international tax news as it develops.