Proposed 2025 Trump Tax Plan: What It Could Mean for You and Your Business
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As we move through the second half of 2025, federal tax changes are once again in the spotlight. Lawmakers aligned with former President Trump have introduced a major tax reform proposal — unofficially dubbed the “One Big Beautiful Bill” — aimed at extending key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) and adding several new tax breaks for individuals, families, and businesses.
Although the bill is still being debated in Congress, it’s important to understand what’s being proposed and how it might affect your taxes — especially if you live or run a business in Maryland.
At AK & Associates (AK2CPA), we’re here to help you stay informed, plan ahead, and take advantage of opportunities before tax season arrives.
What’s Being Proposed?
Extended Tax Cuts and Standard Deduction
The current lower federal income tax rates — ranging from 10% to 37% — are scheduled to expire after 2025. This proposal would make those rates permanent, along with the higher standard deductions:
$26,000 for joint filers
$19,500 for heads of household
$13,000 for single filers
This could mean continued savings for most Maryland families, without needing to itemize deductions.
Increase in SALT Deduction Cap
A significant potential benefit for Maryland taxpayers: the proposal increases the State and Local Tax (SALT) deduction cap from $10,000 to somewhere between $30,000 and $40,000, with a phaseout for high earners.
This is especially relevant for Maryland residents, who often pay higher property and state income taxes than the national average.
New Individual Tax Breaks
The plan also includes several new deductions and exemptions:
Tips and overtime pay would be exempt from federal income tax
Auto loan interest (on American-made vehicles) could become deductible
Extra standard deduction for seniors — providing about $450 in additional tax relief
These changes could bring meaningful savings to hourly workers, older adults, and middle-income families.
Estate Tax and Child Tax Credit Updates
The federal estate tax exemption would rise to $15 million per person, adjusted for inflation — important for wealth planning and business succession.
The Child Tax Credit would remain at $2,000 per child, with a possible temporary increase to $2,500.
What’s Proposed for Businesses?
Corporate and Small Business Tax Benefits
The corporate tax rate could be reduced from 21% to 20%, or potentially 15% for U.S.-based manufacturers.
The popular 20% pass-through deduction (Section 199A) would be made permanent, with a possible increase to 23%, continuing benefits for LLCs, sole proprietors, and partnerships.
Investment Incentives
The bill also hints at extending bonus depreciation and R&D expensing, helping businesses reinvest and grow.
Other Provisions to Watch
A “revenge tax” on foreign investors: Higher withholding rates for income sent to certain countries.
A phaseout of green energy tax credits, which could affect those planning renewable energy investments.
The Congressional Budget Office (CBO) estimates the bill could increase the national debt by $2.4–$2.8 trillion.
Why Maryland Taxpayers Should Pay Attention
If passed, this plan could offer:
Immediate tax savings for families and seniors
Expanded deductions for small business owners
More favorable estate planning options
Because of Maryland’s higher-than-average local tax burdens, many residents stand to benefit significantly from changes to the SALT cap and standard deduction.
What Should You Do Now?
Although the plan hasn’t passed yet, it’s smart to begin reviewing your tax strategy now — especially as we head into Q3.
At AK2CPA, we work with individuals, families, and businesses across Maryland to prepare for both current laws and future changes. We’re ready to help you evaluate what this proposal could mean for your specific situation.
Here’s how we can help:
- Mid-year tax reviews and planning
- Business entity and deduction optimization
- Estate and retirement planning updates
- Preparation for possible SALT and QBI deduction changes
Let’s Plan Ahead — Before Year-End Rush
Even though tax season is still months away, the time to prepare is now. If these proposed changes pass, you’ll want to be ready to take advantage.
AK & Associates
3300 North Ridge Road, Suite 280, Ellicott City, MD
410-719-1000
ak2cpa.com
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