CPA Explains: Trump Tax Cuts | Social Security, Tips and Many More!

This video discusses the proposed tax cuts and a tax rumor or two, that were discussed on the campaign trail. We also discuss the likelihood of the continuation of the Tax Cuts and Jobs Act (TCJT) that was enacted January 2018.

Now that the election is behind us, it’s time to focus on what it means for you and your finances. Campaign promises were made, and with the new balance of power in Washington, some of those promises may now become reality. In this video, we’ll explore the potential tax and policy changes coming your way.

One critical process to understand is reconciliation, a tool used in the Senate to pass budget-related legislation with a simple majority instead of the usual 60 votes required to avoid a filibuster. With the GOP holding 53 Senate seats, the President will likely rely on reconciliation to push through major initiatives, including tax reforms. However, reconciliation can only be used once per year per budget category—spending, revenue, or debt—and any changes made through this process are usually limited to 10 years.

Key Tax Proposals

Let’s start with the Tax Cuts and Jobs Act (TCJA). Passed in 2018 through reconciliation, the TCJA is set to expire at the end of 2025. The new administration is broadly supportive of extending the tax cuts, but any changes will need funding to avoid adding to the deficit.

Another key proposal is eliminating the SALT cap, which currently limits the deduction for state and local taxes to $10,000. This change could significantly impact taxpayers in high-tax states.

We’ve also heard calls for tax-free tips. With over 4.3 million workers—spanning industries like restaurants, salons, and valet parking—relying heavily on tips, this proposal could provide relief for many. However, it raises questions about potential loopholes, like classifying bonuses as tips to avoid taxation.

Social Security and More
There’s been growing momentum to eliminate taxes on Social Security benefits, a throwback to when these payments were untaxed. This could benefit millions of retirees, but funding such a change will be a challenge.

Other proposals include tax relief for overtime pay, Americans living abroad, and military and first responders. While some of these ideas remain vague, they represent the administration’s broader focus on easing financial burdens.

What’s Next?

In the coming months, we’ll see which of these proposals make it through Congress. Reconciliation will likely play a significant role, but limitations mean not every promise can be fulfilled.

Subscribe to stay informed about these developments and how they could affect your financial future!

FREE Retirement Ready Checklist:

00:00 Introduction
00:26 The filibuster
00:43 This can be used three times a year
00:57 TCJA
01:23 No tax on tips
02:07 No tax on Social Security
03:15 No tax on overtime
04:44 No tax on ex-pats
05:43 Possible - no tax on military and first responders

Important Links:

Follow Me on Instagram:

Geoff's Facebook Page

Federal Reserve Board Survey of Consumer Finances:

Social Security Administration Application for Benefits

Current Social Security Cost of Living Adjustment

Social Security Payment Estimator

THE CHANNEL’S MOST POPULAR VIDEOS

Should You Take Social Security at Age 62 and Invest it?

7 GOOD REASONS to File for Social Security Benefits at Age 62

Average Retirement Savings by Age 60. Are You Almost Ready to Retire?!?

The BEST AGE to File for Social Security Retirement Benefits

3 Social Security "Little Known Facts" That Are REALLY Important

Disclaimer: this video is for educational and entertainment purposes only and is not meant to be a substitute for legal, accounting, tax, or professional advice. If you have any specific questions about any legal, accounting, tax or other professional service matter you should consult the appropriate professional services provider.

[mydressmemos]

The thought of retirement makes me cry especially in this economy and taking care of my elderly single sister too. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you weren't to blame for.it's especially difficult for people who are retired.

[nickmadden]

Thanks for selecting relevant topics to keep us informed.

[tonylarimer]

Your presentation cool calm collected and well informed. Thank you

[chrisragner]

I’m equally concerned about my IRA/401K accounts tanking than not having SS that I paid into all these years.

[Barbara-texz]

What is overtime? Employers have a habit of "upgrading" their employees to exempt so they don't have to pay overtime. Family Dollar had a lot of "managers"

[TedWesterfield]

The biggest bugaboo for me is taxes on SS.
In 1935, Rosevelt said that SS benefits would never be taxed. Then came 1983 when Reagan proposed that up to 50% would be taxable and it became law. At the same time, bands for determining provisional income were developed but were never indexed for inflation. That’s right, never indexed for inflation for more than 40 years—all by design to generate even more taxes.
Then comes 1993 with Clinton, who made up to 85% of benefits taxable.
We’re now stuck with SS where greater than 40% of recipients have their benefits taxed. Awful.
The government was certainly aware of these issues in both 1983 and 1993 when the changes were made yet did nothing to protect seniors. What angers me is that SS recipients are the most financially at risk group in our society and yet the government could care less. Truly awful.

[elizabethashton]

I don't mind the SS being taxed, but it was never indexed. The rates were set at $25, 000 for a single and $34, 000 married back in 1983. Today those amounts should be at least $45, 000 for a single and $70, 000 married.

[lindseysturkie]

Thank you, Geoff, for all your advice, expertise, and wisdom. Also appreciate your calm, low-pressure style.

[giniaa]

Love the way you express what is proposed so that it is very easy to follow!

[thatsrite]

2025 is the start of America's Reality TV show.

[jstephens]

Politicians promise no tax on overtime because they intend to roll back or repeal laws that make overtime pay mandatory. If it is not paid, it won't be taxed anyway, so it looks good to the public but costs nothing.

[davem]

SS tax should be put back to how it was pre 1983.

[puravida]

People actually still believe promises politicians make!

[miamivicefanatic]

If no tax on social security is passed, that's going to make it interesting for those of us who are delaying collecting SS until age 70. Many of us might be compelled to start collecting sooner.

[NormanSmith-mf]

When the tax on Social Security was enacted in 1983 it was only aimed at the top end income levels. $1 in 1983 would be equal to $3.17 in 2024 per government statistics. Adjust the worksheet and leave the tax the same. It would again aim the tax at the top income levels not the majority of middle class people.

[paulkoza]

If I don't have to pay tax on living abroad, I might be outta here.

[Hbd]

Just lift the lid on FICA taxes the people making over $168, 000 a year will be taxed on their full amount too. Then adjust some of the formulas which are antiquated and make people that hardly make anything have to pay taxes.

[lroberts]

Excellent video. I’ve been waiting for you to address. Thank you

[marigeobrien]

For clarification -- and in case no one else in the restaurant business has already made a note of this -- at least in my state, actual tips are not taxed... they stopped that years ago. Instead, 8% of your sales are automatically taxed. So, if you are a server and you had 12 tables for an evening and each table's bill was $100 (12x100=1200) then you are automatically taxed 8% ($96) of $1200 for the night. And that is considered your tip. The low number (since usual tips are 18%) is assuming a certain amount of under-tipping or getting no tip at all.

[codymacjohnson]

Thank you for breaking these ideas down