Trump Taxes and Your Wallet: Here's What I See
From doubling the standard deduction to eliminating the Alternative Minimum Tax and estate tax, what could the proposed changes to our tax code mean for you and your investments?


Donald Trump rode into the White House on a wave of campaign promises, including a complete reform of the U.S. tax code. It has been three decades since the tax code has been through any major reform, enough time for it to reclaim its status as one of the most complex and voluminous tax systems in the world.
There is fairly broad consensus that it is time again for significant tax reform, and Trump has introduced his much-anticipated proposal. Although it is very short on details, and it is certain to go through several iterations before it is voted on, we can at least see the direction he is taking and the potential impact it could have on our pocketbooks.
Fewer Tax Brackets
The first place to look is the tax brackets, which have been reduced from seven to three — 10%, 25% and 35%. While this is certain to simplify tax filing, it is unclear how it translates into tax savings. We won’t know until more details emerge on the income ranges within the brackets.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Doubling the Standard Deduction
The larger impact would come from the doubling of the standard deduction. For joint filers it would double from $12,700 to $25,400. That means a married couple would owe $0 in taxes on their first $25,400 in income. For itemizers, many of whom would have a hard time coming up with enough deductions for the $25,400 threshold, it greatly simplifies the process.
Eliminating Deductions
The plan would further simplify matters by eliminating all deductions except mortgage interest and charitable donations. The deductions for state income and sales taxes are also eliminated, which could hurt high earners in states like California and New York. However, for most people, the higher standard deduction would offset the loss. The plan would keep the favorable tax treatment of 401(k) and IRA contributions.
Eliminating AMT
The proposed plan would do away with a major tax headache — the Alternative Minimum Tax — which has been the scourge of an increasing number of taxpayers. It was designed to make sure the wealthy paid their fair share, but over the years it has spread down the income ladder to earners now considered middle income. For higher earners, eliminating the AMT would reduce taxes on certain items; for everyone it will simplify their taxes.
Eliminating Estate Taxes
Throughout his campaign, Trump specifically targeted the “death tax” for elimination. Currently it is a 40% tax on estates valued at more than $11 million for married filers. While this would affect only 0.2% of taxpayers, it would be a huge relief to the farmers and business owners who would otherwise face liquidation in order to pay the tax.
Cut the Corporate Tax Rate
Trump’s rant on high corporate taxes was a centerpiece of his campaign. Now, the reduction of the corporate tax from 35% to 15% is the centerpiece of his proposed plan. This should be good for business growth and the economy.
For Small Businesses, Too
While retirement investors may see a boost in dividends from businesses growing due to lower corporate taxes, the impact on individual taxpayers is probably negligible. However, for individual business owners who operate as a pass-through entity, such as a sole-proprietor or partnership, the corporate tax reduction to 15% also applies. Many business owners could see their tax rates cut by more than half, which would be a huge boon for entrepreneurs and small business owners, and it could spur the economy.
I’m not an economist, I’m a financial adviser, so I won’t address the impact of the president’s plan on the deficit or the national debt. The details are still very sketchy. But from what I can see, there is a lot of simplification and elimination, which is almost always a good thing for clients and investors.
I wouldn’t rush out to change your W-4 withholding. How this plays out on Capitol Hill is far from certain. But there is expected to be tax relief across the income spectrum, and that would be a good thing in my book.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Woodring is founding partner of San Francisco Bay area Cypress Partners, a fee-only wealth consulting practice that provides personalized, comprehensive services that help retirees and busy professionals to enjoy life free of financial concern.
-
I'm a Financial Planner: Here's How to Invest Like the Wealthy, Even if You Don't Have Millions
Private market investments, once exclusive to the ultra-wealthy and institutions, have become more accessible to individual investors, thanks to regulatory changes and new investment structures.
-
Four Ways a Massive Emergency Fund Can Hurt You More Than It Helps
Saving too much could mean you're missing opportunities to put your money to work. Redirect some of that money toward paying off debt, building retirement funds, fulfilling a dream or investing in higher-growth options.
-
I'm a Financial Planner: How to Dodge a Retirement Danger You May Not Have Heard About
Timing is everything, and sequence of returns risk can mean the difference between a retirement nest egg that's overflowing … or empty.
-
Caring for Aging Parents: An Expert Guide to Easing the Financial and Emotional Strain
Early conversations, financial planning and understanding the progression of care needs can help to mitigate stress and protect family relationships.
-
I'm a Financial Adviser: The OBBB Is a Reminder for Older People to Have a Long-Term Plan
The new tax bill presents a good opportunity for retirees to revisit tax plans, look into doing some Roth conversions and consider plans for long-term care.
-
I'm an Insurance Expert: This Is Exactly Why Your Insurance Rates Are Soaring (and What You Can Do)
A dramatic rise in the frequency and cost of severe weather and wildfires means you need to prepare, prepare, prepare — no matter where you live — for higher premiums.
-
Q3 2025 Post-Mortem From an Investment Adviser: Markets Continue to Climb, Gold Shines
The third quarter saw market gains driven by Fed rate cuts and strong earnings, despite high valuations and concerns about speculative trading and job growth. Gold and international stocks could be potential hedges.
-
Moving Abroad? You Might Need a Cross-Border Financial Adviser
If you want to live in another country long term, you could benefit from an expert's guidance. Here's how to find a good qualified adviser to help with residency requirements, documentation, financial laws and tax impacts.