The 2024 election results have set the stage for significant changes to the tax landscape. With Donald Trump returning as president and Republicans controlling Congress, the spotlight is on individual tax provisions from the Trump Tax Plan introduced through the Tax Cuts and Jobs Act (TCJA), which are set to expire in 2025. These changes could dramatically impact your personal finances, and now is the time to plan ahead.

At Hudson & Empire, we’re here to help you navigate these shifts and make the most of every opportunity.

Key Expiring Tax Provisions

Several individual tax benefits introduced under the Trump Tax Plan are set to sunset unless Congress takes action. Here are the major changes to watch:

Lower Income Tax Rates: The current tax brackets (10%, 12%, 22%, 24%, 32%, 35%, and 37%) will revert to higher pre-TCJA levels, with the top rate rising back to 39.6%.
Increased Standard Deduction: The nearly doubled standard deduction will drop back to lower pre-2018 amounts, reducing the benefit for many taxpayers.
State and Local Tax (SALT) Deduction Cap: The $10,000 SALT deduction cap is set to expire, but uncertainty remains about whether it will be extended or adjusted.
Estate and Gift Tax Exemption: The exemption amount, currently $13.99 million per individual, will be halved to approximately $7 million, significantly increasing the tax burden on large estates.
Pass-Through Business Income Deduction (Section 199A): The 20% deduction for qualified business income is scheduled to end, affecting many small business owners.
Charitable Contributions: Cash donations to public charities will be limited to 50% of adjusted gross income instead of the current 60%.

These changes could lead to higher taxes for virtually every individual taxpayer unless proactive planning is undertaken.

Opportunities for Planning

While these changes may seem daunting, they also create opportunities for strategic tax planning. Here’s how Hudson & Empire can assist:

1. Income Timing Strategies

If tax rates increase in 2026, accelerating income into 2025 could result in significant savings. For example, bonuses or capital gains realized before the TCJA rates expire may be taxed at a lower rate.

2. Charitable Giving

We can help you plan large charitable contributions to maximize deductions while the 60% AGI limit is still in effect.

3. Estate Planning

With the estate tax exemption set to decrease, now is the time to transfer assets or establish trusts to minimize the impact of the lower exemption.

4. SALT Deduction Planning

Taxpayers in high-tax states like California and New York may benefit from deferring or accelerating property tax payments depending on whether the SALT cap is extended.

5. Maximizing the QBI Deduction

For small business owners, we’ll analyze how to maximize the benefits of Section 199A while it’s still available.

Why Work with Hudson & Empire?

Tax laws are complex, and the stakes are high as 2025 approaches. At Hudson & Empire, we stay ahead of legislative developments so you don’t have to. Our team offers:

Personalized Tax Planning: We tailor strategies to your unique situation to optimize savings and minimize liabilities.
Proactive Guidance: We’ll keep you informed about potential changes and how they impact your financial goals.
Comprehensive Services: From individual tax planning to estate and gift strategies, we’re your one-stop solution for navigating these changes.

Don’t Wait to Plan

2025 may seem far away, but the best time to start planning is now. By acting early, you can take full advantage of existing provisions and position yourself for success no matter what changes lie ahead.

Reach out to Hudson & Empire today to schedule your consultation. Let us help you prepare for the Trump Tax Plan shake-up and secure a brighter financial future. Together, we’ll make the most of these changes and ensure you’re ready for what’s next.

Frequently Asked Questions (FAQs)

1. What is the Trump Tax Plan?

The Trump Tax Plan refers to the Tax Cuts and Jobs Act (TCJA) introduced in 2017. It includes various tax provisions, such as lower tax rates and higher deductions, many of which are set to expire in 2025.

2. How will the expiring Trump Tax Plan provisions impact my finances?

If no action is taken by Congress, tax rates will rise, the standard deduction will decrease, and certain benefits like the Qualified Business Income deduction and estate tax exemption will be reduced, potentially increasing your tax liability.

3. What steps can I take to minimize the impact of expiring provisions?

Proactive tax planning is key. Strategies include timing your income, maximizing deductions like charitable contributions, and revisiting estate plans to transfer assets before exemptions decrease.

4. Who benefits most from planning ahead for expiring tax provisions?

Taxpayers with high income, large estates, or business ownership can benefit significantly by acting now to minimize potential increases in their tax liability.

5. How can Hudson & Empire help with the Trump Tax Plan?

Hudson & Empire specializes in personalized tax strategies, helping you optimize your finances by navigating expiring provisions and ensuring compliance with tax regulations.

Trump Tax Plan Shake-Up: What Expiring Provisions Mean for Your Finances in 2024