Proposed Trump Tax Plans vs. Current Tax Law
The following summary highlights key differences in the Trump and Biden tax plans. All information has been gathered based solely upon verbal or social media communications directly from the candidates or their respective campaigns.
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Current Tax Law vs. Trump Proposed Tax Plans
| Topic | Current Tax Law | Trump Proposed Plan |
|---|---|---|
| Basic Exclusion Amount | $13,990,000 (exp. 12/31/25) Reverts to 2017 amount, $5,490,000 | Extend basic exclusion amount |
| Corporate tax rate | 21% | Decrease to 20% (15% for companies that make products in U.S.) |
| Qualified opportunity zone investments | Preferential capital gains treatment (exp. 12/31/25) | Extend preferential capital gains treatment |
| Energy preferences | Various fossil fuel tax preferences and green energy incentives | Repeal certain energy credits and other IRA incentives. Retain fossil fuel preferences |
| Deduction for qualified business income | 20% deduction for qualified business income (exp. 12/31/25) | Extend deduction |
| Losses of noncorporate taxpayers | $305,000 limitation (single), $610,000 (MFJ) (exp. 12/31/28) | Extend limitation |
| R&D expensing | Costs must be capitalized and amortized over 5 years (U.S. research) or 15 years (outside U.S.) | Restoration of immediate expensing |
| Bonus depreciation | 60% for 2024; 40% for 2025; 20% for 2026; | 100% bonus depreciation |
| Individual income tax rate | The TCJA set to expire 12/31/25, Increasing top ordinary income tax rate to 39.6% on taxable income above $400,000 | Proposes to make TCJA tax rate reductions permanent (top rate of 37%). Possible further tax rate cut for lower and middle-income taxpayers |
| Carried interest | 3-year holding period for certain property to qualify for capital gains | Extend TCJA rules |
| Social Security benefits | 85% of benefits taxed for certain taxpayers | Exempt all benefits from income taxes |
| Tip income & overtime pay | Subject to income and payroll taxes | Exempt from income taxes |
| Standard deductions and personal exemptions | For 2024, standard deduction of $14,600 (single) and no personal exemptions | Extend TCJA increased standard deduction and elimination of personal exemptions |
| Exemptions from and phase-outs of alternative minimum tax | For 2024, exemption of $85,700 (single) and exemption phase- out starts at $609,350 (single) | Extend TCJA increases in exemption amounts and income at which exemptions start to phase out |
| Itemized deductions | No overall limitation and no deduction for misc. itemized deductions, certain casualty and theft losses, and moving expenses | Extend TCJA suspension of overall limitation and deductions for misc. itemized deductions, certain casualty and theft losses, and moving expenses |
| State and local taxes | $10,000 cap on state and local tax (SALT) deductions | Eliminate the SALT cap |
| Home mortgage interest | Limited to interest on $750,000 mortgage on primary and secondary home; no deduction for interest related to home equity debt | Extend TCJA limitations |
| Car loan interest | Not deductible | Deductible |
