(Image credit: Getty Images)President-elect Donald Trump proposed a number of personal finance initiatives during the presidential campaign, many of which could have a direct effect on your savings and investments. Here’s a look at what you can expect from the new administration.Trump’s effect on income taxesTrump has pledged to extend the individual income and estate tax provisions of the 2017 Tax Cuts and Jobs Act (TCJA), and with the House of Representatives and Senate in Republican control, that effort is expected to succeed. Those provisions, which are set to expire at the end of 2025, doubled the standard deduction, lowered income tax rates and increased the estate tax exemption to a level that makes federal estate taxes a nonissue for the vast majority of taxpayers. In 2025, estates of up to $13.99 million will be excluded from federal estate taxes, or up to $27.98 million for a married couple.The TCJA also doubled the child tax credit from $1,000 to $2,000 per child, and Trump has said he wants to make the increase permanent. The credit phases out for single parents with $200,000 or more in income and married couples who file jointly and have $400,000 or more in income. Vice President J.D. Vance has said he would like to increase the child tax credit to as much as $5,000 per child and extend it to all families regardless of income. However, such a tax break would be enormously expensive and face opposition from Republican lawmakers.Subscribe to Kiplinger’s Personal FinanceBe a smarter, better informed investor.
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Sign up for Kiplinger’s Free E-NewslettersProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.Profit and prosper with the best of expert advice – straight to your e-mail.During the presidential campaign, Trump said he supported eliminating the $10,000 cap on the deduction for state and local taxes (SALT), a move supported by lawmakers from high-tax states. However, scrapping the cap would increase the cost of extending the TCJA tax cuts, which would already add $3.9 trillion to the federal deficit through 2035, or $4.5 trillion with interest, according to the Committee for a Responsible Federal Budget, a nonpartisan nonprofit organization.Trump’s second term may impact EV tax creditsUnder the 2022 Inflation Reduction Act, eligible buyers can claim a tax credit of up to $7,500 for a new electric vehicle, or $4,000 for a used one, at the point of sale, either as a rebate or as a reduction in the cost of the vehicle. Members of Trump’s transition team reportedly want to scrap the tax credit as part of broader tax reform legislation. Elon Musk, founder of EV manufacturer Tesla (TSLA) and a close adviser to Trump, opposes the tax credit, which he says primarily benefits Tesla competitors.The credit probably won’t disappear overnight. Congress would need to amend the Inflation Reduction Act or enact a new law to eliminate it. And a
Gio. Gen 9th, 2025
