Republican Budget Plan Passes but Reveals Little Detail on Status of Spending, Tax Cut Extensions

The Republican-majority House of Representatives passed a budget plan that sets the table for the extension of President Donald Trump’s 2017 tax cuts. At this stage, the budget contained few details on the specifics of what would be extended but with enough momentum, Republicans would be able to bypass Democratic resistance in the Senate and pass legislation for tax cuts.

The Trump administration will now turn their focus to defining their tax cuts, but the bill will likely also include other items from Trump’s campaign, such as tightening border security and boosting U.S. energy production. The plan passed by the house, contained tax cuts of an estimated $5 trillion with a federal deficit increase of $5.7 trillion.

It’s worth noting that the legislation passed by the House mandated $1.5 trillion in spending cuts, while the version passed by the Senate only mentioned $4 billion.

In addition to extending the 2017 tax cuts, Republicans are also aiming to push tax breaks for overtime wages, tipped income, and Social Security benefits, which were a significant component of Trump’s platform before election.

More details will come as they are made available, but it is important to understand which of the 2017 tax cuts are scheduled to expire at the end of this year, to make sure you don’t miss an opportunity.

Expiring provisions of the Tax Cuts and Jobs Act (TCJA)

Many of the provisions in the TCJA are scheduled to expire after 2025 including:

• Lower marginal individual tax rates
• Increased standard deduction
• Higher gift and estate tax exemption

Trump has expressed his desire to make the individual tax rate cuts and estate tax exemption increases permanent and has even floated the idea of cutting tax rates further.

Start planning for 2025

The 2024 filing season is nearly complete, and that means it’s time to start planning for 2025. President Trump’s tax plan is going to be a significant factor in your tax planning so, it is important to begin discussing potential changes with your trusted advisor. Fill out the form on this page to connect with a member of our Tax Practice.