Start Thinking About Your Future Tax Strategy – Professional Tax Services

Now is the time to start considering your tax strategy, not just for 2025 but for 2026 and beyond. We are in a time of substantial uncertainty regarding future taxes. Much of what road our government will follow depends on who will be elected president. We have an idea of what will happen if Trump wins. However, at this point, we don’t even know who the Democratic candidate will be. We do know what Biden was planning, but we don’t know should a Democrat other than Biden be elected what exactly that president would do.
The Tax Cuts and Jobs Act (TCJA) Will Expire at the End of 2025
Many of the tax reforms of the TCJA will be gone should it be allowed to conclude and not be renewed. Trump has not only shown interest in keeping the same tax rules but is considering even more cuts. Biden would probably keep some of the tax cuts for those earning under $400,000 a year. However, those who are the most affluent would have to endure higher tax rates under his plan. Chances are an elected Democrat other than Biden would establish something similar with taxes rising for the wealthy, but it is uncertain how and by how much.
What if TCJA Expires and Doesn’t Come Back?
Income tax rates would revert to 2017 levels.
The standard deduction would be reduced by about 50 percent.
The estate tax exemption would be reduced.
The personal exemption would return.
The child tax credit would be cut.
The 20 percent tax deduction for pass-through businesses would be eliminated.
The cap on property tax deductions would end.
Is There Anything You Should Do Now?
Yes, especially concerning your retirement. At least get some advice from your tax professional. Your tax expert can help you project your lifetime taxes with and without 2026 changes. An accurate plan that contains all the possible scenarios can help ensure your financial stability despite the faltering economy. Our staff, for example, knows what steps taxpayers should follow. If you are a client, we suggest you contact us, as we offer our clients unlimited complimentary tax planning advice.
Professional Tax Services is a locally owned provider serving over 3,500 local residents and businesses. For more information, call 661-259-1967 or visit www.scvprotaxservices.com.