By all accounts, the November election was a key event when it comes to the tax landscape. President Donald J. Trump has called for an extension of his historic 2017 tax cuts, and has proposed a variety of other changes to help workers and the economy at large. With Republican control of Congress, he has the opportunity to enact much of his agenda. However, tight majorities in the Senate and especially the House suggest that he’ll need to maintain discipline in the GOP, potentially negotiating to resolve any differences on legislative specifics.

For taxpayers, this landscape currently allows for a wait-and-see approach. Most observers believe the president and his allies will start to tackle major legislation in the early months of the year (see “Trump 2.0: Built for Speed”), suggesting that there will be more clarity for informed planning choices as 2025 progresses. Gone is a sense of concern that generous tax provisions may expire, but it’s also true that a “heavy lift” lies ahead, so little should be assumed.

What can we expect from the new Trump administration? Below, are some of the major tax ideas that the president has laid out, as well as some high-level thoughts on what they could mean for tax planning. You’ll also find a broader checklist of key financial wellness ideas to consider as we move further into 2025.

Maintaining Momentum on Taxes

A core part of Trump’s agenda, as mentioned, is the extension of the tax reforms he introduced eight years ago. This would include extending or making permanent current rates and exemptions, such as the top income tax rate of 37% and estate and gift tax exemption of $13.99 million per individual,¹ and extending the elevated standard deduction (currently $30,000 for married couples filing jointly) that is utilized by most taxpayers.

Trump would also offer new tax breaks in certain areas. For example, he has proposed to eliminate taxes on income from tips and Social Security benefits. He favors no longer taxing overtime pay and removing or raising the limitation on the state and local tax deduction (currently $10,000). To help the U.S. car industry, he has discussed making interest on auto loans tax deductible. During the election, Vice President JD Vance argued for raising the annual child tax credit from $2,000 to $5,000.

For businesses, Trump wants to maintain and expand current tax relief where it benefits the domestic economy. For example, he has proposed trimming the current 21% corporate tax rate to 20% generally and to 15% for companies manufacturing goods in the U.S. He would also reintroduce the 100% bonus depreciation rate and would extend the 20% pass-through deduction for partnerships, LLCs and S corporations.

In addition, Trump plans to use tariffs to generate leverage with trading partners and geopolitical adversaries, and more broadly to help support U.S. companies. This has been controversial, although some argue that the potentially negative impacts of such levies in terms of trade conflicts or higher prices could be offset by generally pro-business administration policies, reduced red tape and expansion of energy production.

Trump’s Tax Proposals

Planning Over the Coming Months

The realization of a Republican sweep has vastly changed the tax conversation from just a few months ago. Speculation has subsided concerning a wealth tax on billionaires, the elimination of the step-up in tax basis at death or an increase in income tax rates. At the same time, there is growing acknowledgement of the country’s strained fiscal situation and the potential pressures that higher federal deficits and borrowing could have on interest rates and economic growth down the road.

Overall, we think it’s reasonable to expect that most Tax Cuts and Jobs Act provisions would be extended. Regardless of outcome, the estate and gift tax exemption should provide significant opportunities to transfer wealth both in terms of direct transfers and through the use of trusts. The annual exclusion ($19,000 each to an unlimited number of recipients) will also be a natural go-to for gifts that are estate- and gift-tax free and avoid reducing the exemption noted above. Depending on the proposals for individual income tax rates, it may be helpful for taxpayers to defer income and accelerate deductions into the current year where appropriate.

Over the coming months, Congress will be developing massive legislative packages to power the Trump agenda through the budget reconciliation process. As this happens, the contours of tax changes will become more evident, at which point it will become more feasible to consider appropriate planning strategies for the rest of the year and beyond. In the meantime, we will be following developments closely in what will likely be a very eventful year in Washington, DC.