If you’ve been keeping an eye on recent news, you may have heard about President Trump’s proposed tax changes. Many Americans are wondering how these potential shifts could affect their finances, especially during tax season. With questions like “Are tips and overtime pay tax-free now?” or “Should I file my taxes now or wait?”, it’s crucial to understand the details and timing.
What’s the Latest on Trump’s Tax Proposals?
First and foremost, it’s important to note that no tax laws have changed yet due to President Trump’s proposals. These changes will not impact your 2024 taxes, which are filed in 2025. The proposals are still under discussion, and no new legislation has passed yet.
For those concerned about recent IRS layoffs or a potential government shutdown, there’s no need to worry. These factors won’t affect your ability to file your taxes or receive your refund. The latest IRS data (as of March 7, 2025) reports a 5.7% increase in refunds from the previous year, with the average refund amount now at $3,324.
What Are Some of Trump’s Proposed Tax Changes?
Here’s a breakdown of some of the key proposals.
- Extension of TCJA Tax Cuts
Trump’s proposal seeks to make the tax cuts from the 2017 Tax Cuts and Jobs Act permanent. This includes the lowering of individual tax rates, the near doubling of the standard deduction, and expanded Child Tax Credits. Additionally, the SALT deduction cap could be lifted, benefiting those in high-tax states.
- Exemptions for Tip Income and Overtime Pay
Trump has proposed exempting tip income from taxes, which could offer significant relief for hospitality and service workers. Similarly, there’s talk of exempting overtime pay for certain workers, which would reduce taxable income and lower tax liability for those working overtime.
- No Tax on Social Security Benefits
Another proposal would exempt Social Security benefits from taxation, which could help retirees by lowering their taxable income.
- Child Tax Credit Expansion
The proposal to expand the Child Tax Credit could increase the credit to $5,000 per child, providing more relief to families.
- Corporate Tax Cuts
Trump also advocates for lowering the corporate income tax rate to stimulate business growth and reinvestment.
- Auto Loan Interest Deductions and Family Caregiver Tax Credit
The auto loan interest deduction, if reinstated, would benefit those who use vehicles for work. Additionally, a new family caregiver tax credit could cover up to $5,000 in expenses for those caring for family members.
Should You Wait to File Your Taxes?
Even with these proposals in the mix, there’s no need to delay filing your 2024 taxes. These changes won’t affect your filings for this year. If you’re concerned about future tax changes, BASC Expertise is here to help you navigate any new laws as they come into effect.
BASC Expertise keeps you updated on the latest tax regulations, ensuring your filings are accurate and efficient. Whether you’re filing on your own or prefer professional assistance, BASC Expertise is ready to support you throughout the process.
In Summary: What You Need to Know
- No Immediate Changes: The proposed changes won’t impact your 2024 taxes.
- IRS Processing Is Unaffected: Recent IRS layoffs haven’t delayed refunds or processing.
- Proposals May Affect Future Filings: If enacted, Trump’s proposals could affect your 2025 taxes and beyond.
- File Your Taxes Now: Don’t delay filing your taxes—BASC Expertise is ready to guide you through the process.
If you’re uncertain about how these changes might affect you in the future, BASC Expertise will keep you informed and prepared. Get in touch with us today to ensure your taxes are filed correctly and efficiently.