Don't Hide Away

Last week I wrote about not taking any drastic measures while thinking about taxes in the wake of Donald Trump’s election. I definitely still stand by this, especially at a time when it seemed like one of the best things everyone could do was take a deep breath no matter how you felt about the election’s outcome. Not being super reactionary is one thing, though, while remaining ignorant and hiding your head in the sand is another.  This is especially true with Trump giving all indications that he plans to act quickly once he gets into office.

Just how fast he can do everything certainly remains to be seen. But just as last week I said there is unlikely to be anything that will affect the filing of your next tax return, it is likely that there will be actions taken that will affect your 2025 return.

One of the most likely things is extending expiring provisions of Trump’s 2017 Tax Cuts and Jobs Act. Much of this could result in simply maintaining the status quo and looking much like things did with your last tax return. This would mean not needing to make moves to make up for provisions that could have run out.

Beyond that, much of what Trump is looking to do is reducing taxes for some in higher wealth categories, many of whom will be very happy if he does choose to revisit the $10,000 cap on state and local tax deductions. Corporations would also be happy if he can drop their tax rate, too, even if it only ends up being by a percentage point.

I think it’s worth keeping in mind that there are a lot of moving parts here that go beyond simply tax law. Just how much money is expected to be collected via any tax plan then becomes a crucial part of budgeting. And especially with Trump’s championing of higher tariffs, the country’s fiscal situation is likely to change in multiple areas and these will probably all have to be weighed against each other when determining an overall fiscal policy.

The end point, though, is that it seems impossible that there will not be changes. So even if one cannot pinpoint what they will be at this moment, there is still value in being aware that they are coming and remaining open to seeing what they will mean for your personal situation.

Warmly,

Josh Bousquet
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