Many accountants were doubtful of Donald Trump's chances for a successful reelection on Nov. 5, despite the fact that many also thought he would be a better candidate for the profession. With his return to the White House now confirmed, the waiting game begins to see which promises of wide-sweeping change to the tax landscape come to life.
The Republican majorities in the Senate and House of Representatives will grant President-elect Trump an easier time in refreshing many of the expiring provisions in his 2017
"These changes reshaped tax planning for both individuals and businesses, creating new opportunities for savings," said Arron Bennett, CEO of the Oak Ridge, Tennessee-based tax planning firm Bennett Financials.
It's increasingly likely that Trump will seek to make certain provisions of the TCJA like the QBID permanent, as was put forward in the
Mark Luscombe, principal analyst in Wolters Kluwer Tax and Accounting, said cementing the sunsetting provisions of the TCJA "would be very expensive" and that a more beneficial compromise for addressing deficit concerns would be "to just extend them for a few more years."
"An extension would benefit almost all taxpayers; however, the bulk of the tax benefit would go to higher-income taxpayers," Luscombe said.
Read more:
Regulatory uncertainty is just one question looming across the profession, however. With control of both houses of Congress,
Much of the funding granted to the IRS under the Inflation Reduction Act of 2022 has gone towards strengthening the agency's enforcement capabilities, which in turn generate revenue. Other funds have been used to bolster taxpayer services and to support regular operations.Andrea Harrington, a CPA and partner at the Glastonbury, Connecticut-based accounting firm Fiondella Milone & Lasaracina, said she hopes funding for the IRS is maintained, specifically directing resources towards "processing amended returns related to COVID relief provisions.""The uncertainty over what exactly will happen makes planning a bit more challenging. … We'll be watching legislative proposals even more closely so we can pivot in our recommendations as needed," Harrington said.
Read more:
Below is a compilation of expert insight and predictions into what the tax landscape could look like in 2025 and what professionals need to start considering during planning discussions.
IRS funding in limbo following Trump win
In the wake of Trump's successful bid for reelection, many accountants predict the new administration will seek to cut the IRS's funding more so than in recent years.
Republican legislators have already seen success in efforts to
"I think IRS funding is at significant risk right now, both the annual appropriation funding as well as the remaining IRA funding," Rochelle Hodes, Washington National Tax Office principal at the Top 25 Firm Crowe, said in an interview with AT's
Read more:
A look at Trump promises for the 2025 tax landscape
Trump's campaign promises on taxes were numerous and sweeping, ranging from lowering the corporate tax rate and tax credits for caregivers and those purchasing domestically made automobiles, to the return of 100% bonus depreciation.
As the countdown to his second term continues, along with the approaching deadline for many parts of the Tax Cuts and Jobs Act of 2017, much is up in the air.
"No one has a crystal ball on what's going to happen here, but certainly it's a little bit clearer based on a Trump victory than it would have been based on a Harris victory," Brian Newman, a tax partner at Top 25 Firm CohnReznick in Hartford, Connecticut, said in an interview with AT's
Read more:
What are preparers worried about in the coming administration?
Accounting professionals and preparers say that a new but not wholly unfamiliar Trump administration, will bring new approaches to taxes and the surrounding regulatory environment with it.
Kelly Myers, an advisor with Myers Consulting Group, and formerly a career IRS officer with 30-plus years of experience, told AT's
"People will be watching as they move forward on the Tax Cuts and Jobs Act; the biggest thing is the SALT limitation with its $10,000 cap," Myers said.
The provisions of the TCJA are top of mind for Trump, as issues like the qualified business income deduction and a renewed R&D credit operating on a dollar-for-dollar basis are up for change.
Read more:
What is Trump focused on when it comes to taxes?
President-elect Trump had an eventful first term when it came to tax policies, implementing the likes of the
The estimated price tag for extending all the provisions of the TCJA amounts to roughly $4.6 trillion, according to Rochelle Hodes, Washington National Tax Office principal at the Top 25 Firm Crowe.
"If they are allowed to expire, that would raise the tax for many individuals, which is an unattractive proposition for any president or for Congress," Hodes said in an interview with AT. "The decision will have to be made about which will be allowed to expire, whether or not some of the provisions will be changed in order to accommodate whatever budget goals are agreed upon, then the decision and consensus will have to be made concerning offsets to pay for the resolution of expiring provisions."
Read more:
Approaching the impending tax quagmire in 2025
Industry professionals achieved a small measure of TCJA relief following Trump's successful bid for reelection, as many expiring provisions are now much more likely to be renewed.
But where other legislative efforts are concerned, a
Jonathan Traub,
"You will need almost perfect unity — more so in the House than the Senate," Traub said. "This really gives a lot of power, I think, to any small group of House members who decide that they will lie down on the train tracks to block a bill they don't like or to enforce the inclusion of a provision that they really want."
Read more:
