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U.S. President Donald Trump announces the NFL draft will be held in Washington, at the White House in Washington, D.C., U.S., May 5, 2025.<\/p>\n
Leah Millis | Reuters<\/p>\n<\/div>\n<\/div>\n<\/div>\n
As negotiations ramp up for President Donald Trump<\/a>‘s tax agenda, there are key issues<\/a> to watch, according to policy experts.\u00a0\u00a0\u00a0<\/p>\n The House Ways and Means Committee, which oversees taxes, released a preliminary partial text<\/a> of its portion of the bill on Friday evening. However, the bill could change significantly before the final vote. The full committee will debate and advance<\/a> this legislation on Tuesday.<\/p>\n With control of the White House and both chambers of Congress, Republican lawmakers can pass Trump’s package without Democratic support via a process known as “reconciliation<\/a>,” which bypasses the Senate filibuster with a simple majority vote.<\/p>\n But reconciliation involves multiple steps, and the proposals must fit within a limited budget framework<\/a>. That could be tricky given competing priorities, experts say.\u00a0<\/p>\n More from Personal Finance:<\/strong> “The narrow [Republican] majority in the House is going to make that process very difficult” because a handful of votes can block the bill, said Alex Muresianu, senior policy analyst at the Tax Foundation.<\/p>\n Plus, some lawmakers want a “more fiscally responsible package,” which could impact individual provisions, according to Shai Akabas, vice president of economic policy for the\u00a0Bipartisan Policy Center.<\/p>\n As negotiations continue, here are some key tax proposals that could impact millions of Americans.<\/p>\n<\/div>\n The preliminary House Ways and Means text includes some temporary and permanent enhancements beyond the TCJA. These include boosts to the standard deduction, child tax credit, tax bracket inflation adjustments, the estate tax exemption and pass-through business deduction, among others.<\/p>\n<\/div>\n Some lawmakers are also pushing for bigger tax breaks than what’s currently offered via the TCJA provisions.<\/p>\n “The child tax credit<\/a> is one that we’re watching very closely,” Akabas said. “There’s a lot of bipartisan agreement on preserving and hopefully expanding that.”\u00a0\u00a0<\/p>\n TCJA temporarily increased the maximum child tax credit to $2,000 from $1,000 per child under age 17, and boosted eligibility. These changes are scheduled to sunset after 2025.<\/p>\n The House in February 2024 passed a bipartisan bill<\/a> to expand the child tax credit, which would have boosted access and refundability. The bill didn’t clear the Senate<\/a>, but Republicans expressed interest in revisiting the issue. \u00a0<\/p>\n The early House Ways and Means text proposes expanding the maximum child tax credit to $2,500 per child for four years starting in 2025.<\/p>\n<\/div>\n Another TCJA provision \u2014 the $10,000 limit on the deduction for state and local taxes<\/a>, known as “SALT” \u2014 was added to the 2017 legislation to help fund other tax breaks. That provision will also expire after 2025.<\/p>\n Before the change, filers who itemized tax breaks could claim an unlimited deduction for SALT. But the so-called alternative minimum tax<\/a> reduced the benefit for some higher earners.\u00a0<\/p>\n Repealing the SALT cap has been a priority<\/a> for certain lawmakers from high-tax states like California, New Jersey and New York. In a policy reversal, Trump has also voiced support<\/a> for a more generous SALT deduction.\u00a0<\/p>\n “If you raise the cap, the people who benefit the most are going to be upper-middle-income,” since lower earners typically don’t itemize tax deductions, Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center, previously told CNBC<\/a>.<\/p>\n The SALT deduction was absent from the preliminary House Ways and Means text. But Congressional negotiations<\/a> are ongoing.<\/p>\n<\/div>\n On top of TCJA extensions, Trump has also recently renewed calls<\/a> for additional tax breaks he pitched on the campaign trail, including no tax on tips<\/a>, tax-free overtime pay<\/a> and tax-exempt Social Security benefits<\/a>. These ideas were not yet included in the early House Ways and Means text. \u00a0<\/p>\n However, there are lingering questions about the specifics of these provisions, including possible guardrails to prevent abuse, experts say.<\/p>\n For example, you could see a questionable “reclassification of income” to qualify for no tax on tips or overtime pay, said Muresianu. “But there are ways you could mitigate the damage.”<\/p>\n<\/div>\n<\/div>\n\n
The Fed holds interest rates steady. Here’s what that means for your wallet<\/a>
IRS loses nearly 1 in 3 tax auditors in DOGE cuts, watchdog finds<\/a>
What new Social Security head Bisignano may mean for benefits<\/a><\/p>\nExtend Trump’s 2017 tax cuts<\/h2>\n
Child tax credit expansion<\/h2>\n
‘SALT’ deduction relief<\/h2>\n
Trump’s campaign ideas<\/h2>\n
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