Tax Planning Under a Trump Presidency

The economic landscape under PresidentDonald Trump continues to shape tax planning strategies for individuals andbusinesses alike. The last thing the recovering post-pandemic economy needs isan increase in financial burdens, and Trump’s policies aim to maintain economiccompetitiveness by preserving low tax rates and supporting business growth.Here’s what you need to know about tax planning in this environment and how tooptimize your finances.

Overview of Trump’s Tax Policies in 2025

President Trump’s administration hasdoubled down on the principles of the Tax Cuts and Jobs Act (TCJA) of 2017,focusing on tax reductions for individuals and businesses. Key policiesinclude:

• Preservation of the TCJA Tax Cuts:     The administration continues to maintain the lowered individual income tax     rates, with the top marginal rate set at 37%.
• Support for Business Investment:     Corporate tax rates remain at 21%, encouraging business reinvestment and     economic expansion.
• Capital Gains and Dividend Tax Relief: Favorable tax treatment for long-term capital gains and     qualified dividends, with rates capped at 20%.
• Expanded Deductions for Small Businesses: Continued availability of the Section 199A Qualified Business     Income (QBI) deduction, allowing pass-through entities to deduct up to 20%     of their income.
• Estate Tax Exemptions: The lifetime     estate and gift tax exemption remains historically high at $12.92 million     per individual (adjusted for inflation).

While these policies benefit manytaxpayers, they also present opportunities for strategic tax planning tomaximize savings.

Key Tax Strategies Under the TrumpAdministration

1. Income Deferral and Roth Conversions

With low individual tax rates remaining inplace, consider strategies that capitalize on these rates:

• Roth IRA Conversions: Convert     traditional IRAs to Roth IRAs now to lock in current tax rates. This     strategy ensures future withdrawals are tax-free.
• Income Deferral: Push income into     future years where possible, leveraging today’s lower rates.

2. Capital Gains Planning

Take advantage of the favorable taxtreatment for long-term capital gains by strategically harvesting gains orlosses:

• Harvesting Gains: Sell appreciated     assets to lock in gains at the current capital gains tax rate of 20%.
• Offsetting Losses: Use capital     losses to offset gains and reduce overall tax liability.

3. Estate Planning

President Trump’s policies have maintainedgenerous estate tax exemptions, but these provisions are set to sunset in 2026unless renewed. To maximize benefits:

• Utilize Exemptions: Consider     gifting assets or setting up trusts to use the $12.92 million exemption     per individual ($25.84 million for couples).
• Plan for Future Changes: Work with     estate planning professionals to prepare for potential changes in     exemption thresholds after 2025.

4. Business Tax Optimization

Businesses continue to benefit from Trump’spro-business policies. Optimize your tax position by:

• Maximizing Deductions: Leverage the     Section 199A QBI deduction and accelerated depreciation methods to reduce     taxable income.
• Utilizing Opportunity Zones: Invest     in qualified Opportunity Zones for tax deferrals and potential tax-free     growth.

Potential Risks and Considerations

While Trump’s tax policies remainfavorable, taxpayers should prepare for:

• Legislative Changes: With a divided     Congress, future tax policies could shift depending on political dynamics     after 2025.
• Expiration of TCJA Provisions: Many     provisions, including individual rate cuts and estate tax exemptions, are     set to expire in 2026 without further legislative action.
• Inflationary Pressures: Rising     inflation could erode the real value of exemptions and deductions,     requiring proactive financial planning.

What Should You Do Next?

1. Consult Professionals: Work with a     trusted tax or financial advisor to develop a tailored plan that aligns     with your financial goals and minimizes tax liability.
2. Act Early: Leverage the current tax     environment by accelerating income, gifting assets, or making strategic     investments before potential changes take effect.
3. Monitor Legislative Updates: Stay     informed about potential tax reforms and adjust your strategy accordingly.

If you don’t have a tax advisor, we canhelp point you in the right direction. Qualified individuals can save up to$0.35 on every dollar owed to Uncle Sam. Don’t wait—start planning today totake full advantage of the tax-saving opportunities under President Trump’spolicies.

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