President Trump was inaugurated for his second term on Monday, and tax policy is set to be a key focus of his administration. Andrew Gordon, tax attorney, CPA, and partner at Gordon Law, joins Wealth to discuss three potential tax changes that could come under Trump 2.0. Gordon notes that firstly, Trump has promised to extend the Tax Cuts and Jobs Act (TCJA). He explains, “The TCJA cut the tax rates across the board, so regardless of which tax bracket you are in, most likely you had a decrease in taxes after the TCJA was passed. However, it is set to expire in 2025 and so without action, your tax rates would actually increase.” Trump has also vowed to eliminate taxes on income from tips, Social Security, and overtime. Additionally, he plans to create an External Revenue Service. “The External Revenue Service would collect taxes, duties, and tariffs from foreign sources, and specifically foreign businesses,” Gordon says. “So imports will likely have an increase of tariffs of 10 to 20% on all imported goods. What this may mean, however, is an increase in costs for people making purchases … [but] businesses may try to absorb those costs, so it’s not necessarily a for sure thing that it will lead to an increase of consumer prices.” Watch the full video above to hear Gordon break these proposals and explain how they could impact your taxes.
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