How President Trump’s Re-Election Will Affect Your Taxes in 2025

With the results of the election now coming to a conclusion, Americans can anticipate significant impacts on their taxes under the re-election of the 47th President of the United States Donald Trump in 2025. 

During Trump’s campaign, he proposed a number of tax cuts that would have a possibility to be enacted. One of the major tax proposals that may come into fruition would be the extension of the tax cuts enacted during Trump’s first administration, since those set of laws are set to expire in 2025. When Trump was elected in office during his first term in January 2017, he lowered the corporate tax rate from 35% to 21%, reduced individual income tax rates, and increased the standard deduction for individual tax returns. Trump suggested he may lower the corporate tax rate further, from 21% to 15%. We will wait to see if this indeed does get passed into legislation. Another proposal hinted by Trump during his campaign run was that he would abolish taxes on tips. This may affect millions of Americans in certain professions who receive tips as part of their annual income, most notably in the food and beverage industry. However, such a proposal does have some drawbacks. Primarily, this law can cause ambiguity of what is classified as income from tips versus income without tips. As a result, this implementation would reduce the amount of income taxes the federal government would bring in from the workforce. Trump also suggested that income received from Social Security should be tax free. A substantial percentage of Social Security recipients pay federal income tax. This is mainly due to the fact that these individuals have other sources of income that raise them above the threshold that require them to pay income tax. Again, eliminating Social Security taxes would mean less tax revenue for the federal government.