The Republican National Convention ended on July 18. Unfortunately, the GOP platform provides limited details on tax proposals. If elected, Trump would need congressional support to enact legislation that would codify the proposed changes. What does this mean for taxpayers? How will this change after the Democratic National Convention concludes in August? Here’s what we know so far.

Check out key tax provisions from the Democratic National Convention, which took place in August 2024, in our blog, Proposed Tax Reforms: Key Takeaways from the Democratic Convention.

Individual Taxpayer Concerns

Many of the TCJA provisions that affect individual taxpayers are only temporary. The GOP platform specifically promises to make the following expiring individual tax provisions permanent:

• Doubled standard deduction, and
• Expanded child tax credit.

However, it does not address other TCJA provisions that many people would like to see continue, including

• the doubled unified estate and gift tax exemption, and
• reduced individual tax rates and revised tax bracket thresholds.

On the flipside, many people are eager to see certain unpopular provisions sunset.

Examples include limits on itemized deductions for:

• State and local taxes,
• Mortgage and home equity interest expenses,
• Miscellaneous itemized deductions, including investment management costs, legal fees and unreimbursed business expenses, and
• Personal casualty and theft losses (except for losses incurred in federally declared disasters).

Of course, most taxpayers would like to see the return of dependent and personal exemptions, too. The GOP platform simply says that it will make permanent the TCJA provisions that “spurred economic growth for all Americans.” That’s an ambiguous phrase that leaves much to interpretation.

The platform also promises to eliminate taxes on tips for restaurant and hospitality workers, along with pursuing “additional tax cuts” for individuals. However, some critics have expressed concerns that getting rid of taxes on tips could have other implications. For example, it could cause employers to reduce tipped workers’ wages, it is potentially unfair to other workers, and it could cause businesses to transition nontipped employees to get paid in a tip-based system. Legislation to provide a credit for reported tip income has already been introduced in the Senate with some bipartisan support.

Other major concerns of everyday Americans include the affordability of housing and rising education costs. The GOP platform promises (without specifics) to provide tax incentives for homeownership and reduce federal regulations that raise housing costs.

The party also supports homeschooling, tax incentives for unpaid family caregivers, funding career training programs and expanding the benefits of Section 529 education savings accounts.

Business Owner Concerns

Certain TCJA provisions for businesses are also scheduled to expire in 2026, most notably the 20% qualified business income (QBI) deduction for pass-through entities and sole proprietors. Most business owners (along with some legislators from both parties) favor extending the QBI deduction.

One TCJA provision that’s already started to be scaled back is the expanded bonus depreciation allowances. For 2024, 60% first-year bonus depreciation is available for qualified new and used property, down from 80% last year and 100% in 2022. Next year, it’s scheduled to drop to 40%. Reinstating full bonus depreciation is another proposal that would help lower taxes for business owners.

Most other TCJA provisions for businesses are permanent, including:

• The liberalized Section 179 first-year depreciation rules,
• The flat 21% tax rate for C corporations and personal service corporations, and
• New rules that require capitalization of research and experimentation expenses (starting in 2022). Beware: Congress could potentially pass future legislation to repeal so-called “permanent” tax breaks to generate additional tax revenue.

The House recently passed the Tax Relief for American Families and Workers Act of 2024, but it’s stalled in the Senate. Notably, the bill would extend 100% bonus depreciation through 2025 and temporarily restore immediate deductions for R&E expenses. The GOP platform doesn’t specifically address this pending legislation, however.

Additionally, U.S. business owners may be affected by GOP promises to:

• Cut back burdensome federal regulations,
• Impose baseline tariffs on foreign-made goods,
• Remove China’s most-favored-nation status,
• Negotiate new, more favorable trade agreements with foreign countries,
• Eliminate regulations for reporting and monitoring cryptocurrency transactions, and
• Repeal an executive order that hinders artificial intelligence innovation.

These proposals aim to spur domestic business growth, and some would possibly help pay for additional tax cuts.

Will Campaign Promises Be Kept?

The GOP has made it clear that extending the expiring TCJA provisions is a top priority. But not all the expiring provisions are favorable for taxpayers. And politicians often make promises when campaigning that they don’t deliver on after they’re elected. After several years of congressional deadlock on most tax-related legislation, it’s unclear which of the expiring TCJA provisions will be extended and which will be allowed to expire. It’s also unclear, if certain tax cuts are extended, how the government will make up for the shortfall in tax revenue.

More details are sure to be unveiled at the Democratic National Convention in August and on the campaign trail. We’re closely monitoring tax proposals from both sides of the aisle to help individuals and business owners plan for the future.