How a New Presidency Could Shape Your Taxes in 2025: A Non-Partisan Look at What’s Next for Entrepreneurs | Danielle’s Desk | By Danielle Michel, CP

As we head past elections and looking towards a new presidency, you may be wondering: How will this shift the economy, and what might Trump’s return to office mean for business owners like you? Politics aside, election cycles bring both excitement and uncertainty—and in many ways, that affects the economy. From investment trends to tax legislation, each election holds the potential to create ripple effects for entrepreneurs and high-income individuals.

First, a little truth check: while campaign promises can sound enticing, they don’t always become reality. When it comes to taxes, each administration’s actual policies often look a little different from what was outlined on the campaign trail. But keeping tabs on potential changes can prepare you to make strategic choices—so let’s break down some of the main proposals Trump has made and what they might mean for entrepreneurs in 2025.

How Election Years Shift the Economy

Election years can trigger a mix of anticipation and caution in the financial world. Historically, market volatility tends to pick up as investors react to campaign rhetoric and speculate on future economic policies. This cautious approach can often affect major sectors differently, influencing hiring, growth plans, and financial projections.

For entrepreneurs, election years might mean re-evaluating strategies based on potential tax changes or shifts in trade policies. Some business owners see it as a time to prepare, setting aside funds or adjusting investments as they wait for more economic clarity. While no two election years are the same, financial markets and sectors closely tied to government regulation—like energy, healthcare, and real estate—to be especially sensitive to the outcomes.

Trump’s Tax and Tariff Proposals: What Could Change?

So, what does Trump’s campaign have in store for the economy, particularly for taxes?

Here’s a look at some of the most notable tax and tariff proposals that he’s floated.

1. Making the Tax Cuts and Jobs Act (TCJA) Expirations PermanentThe TCJA, introduced in 2017, brought significant tax cuts for corporations and individuals. However, many of these provisions are set to expire in 2025. Trump’s proposal to make these cuts permanent could mean long-term relief for business owners by keeping corporate tax rates low and extending individual tax breaks.What it means for you: Permanent TCJA cuts might provide additional capital to reinvest in your business. Lower corporate taxes mean you can keep more earnings, potentially fueling growth and expansion.
2. Exempting Tips, Social Security Benefits, and Overtime Pay from Income TaxesThis move is aimed at reducing tax burdens on specific income sources, especially for hourly workers. While this won’t directly impact most entrepreneurs, it could benefit service-based businesses by increasing disposable income among lower-wage earners.What it means for you: For those in retail, food service, or hospitality, an increase in disposable income for workers might boost consumer spending—a potential win for business owners in these industries.
3. Restoring the TCJA Business Tax ProvisionsThe TCJA also introduced business-friendly policies, like full expensing of certain capital investments and limitations on deductions for interest expenses. Trump’s plan to reinstate these provisions could result in more opportunities to lower tax liabilities through business expenses.What it means for you: Reinstating these deductions could make capital-intensive projects, such as equipment upgrades or facility expansions, more financially feasible.
4. Creating a Deduction for Auto Loan InterestThis proposal would allow a new itemized deduction specifically for auto loan interest, potentially benefiting entrepreneurs who rely on vehicles for business.What it means for you: If you’re self-employed or run a business that requires travel, this deduction could lower the after-tax cost of financing vehicles, easing operational expenses.
5. Eliminating Green Energy SubsidiesTrump has voiced an intention to roll back the green energy subsidies included in the Inflation Reduction Act. This could slow the transition to renewable energy in favor of traditional energy industries.What it means for you: If you’re involved in or supply to renewable energy sectors, this may impact your industry’s growth. Conversely, traditional energy-dependent businesses might see stability or growth in areas like oil and gas.
6. Universal 20% Tariff on All Imports and Raising Section 301 Tariffs on China to 60%Trump has proposed a sweeping 20% tariff on all imports, alongside an increase in Section 301 tariffs specifically targeting China.What it means for you: This proposal would likely drive up costs on imported goods, which may impact any business that relies on foreign-manufactured products or parts. For industries like retail, automotive, or electronics, these tariffs could tighten margins and require a strategic shift, like exploring domestic suppliers or adjusting pricing structures.

A Word on Planning: Election-Year Savvy for Entrepreneurs

As Trump’s 2025 tax proposals illustrate, there’s always a mix of direct and indirect impacts to consider. Even though there’s no guarantee these ideas will become policy, being informed can give you a head start on planning. Here are some proactive steps to consider as the election season unfolds:

1. Stay Informed on Policy Trends: Tax policies can be intricate, but staying up to date can help you understand how proposed changes could affect your industry.
2. Consider Adjusting Business Expenses: Depending on how tax cuts or tariffs unfold, you might want to plan big purchases or expansions strategically.
3. Prepare for Potential Cost Increases: Especially if tariffs go up, look for opportunities to offset costs or optimize efficiency to avoid passing them on to customers.

The Bottom Line

There’s no crystal ball that tells us exactly what a Trump presidency in 2025 would bring. But by understanding proposed policies, entrepreneurs can start preparing for potential shifts. Whether it’s adjusting your approach to tariffs or taking advantage of new deductions, a proactive mindset can help you navigate any economic landscape.

As the founder of Checkmate Tax Advisory, I'm committed to sharing insights on the evolving business landscape. While my expertise provides valuable information, it's not intended as formal financial advice. For personalized guidance, consult with qualified financial advisors. Connect with Checkmate for strategies to thrive in a changing world!

About the Author

Danielle Michel, CPA is a serial entrepreneur and venturist whose expertise spans business consulting, specialized tax solutions at Manufacturing Tax Recovery Services and advisory at Checkmate Tax Advisory, podcasting at The Upside, Downside Podcast , and real estate investing. A passionate advocate for entrepreneurs, she's dedicated to empowering others with the tools at The Suppressed Entrepreneur and mindset to realize their business dreams. In her spare time, Danielle prioritizes health and wellness as a key foundation of her success and that of her businesses.