I’m an Accountant: 3 Changes I Anticipate Coming to Your Taxes If Harris Wins the 2024 Election
Written by
Angela Mae
Edited by
Amber Barkley
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With less than three months until Election Day, voters everywhere are still trying to figure out which U.S. presidential candidate to vote for — and how their policies could affect taxes. The outcome of this next election could have a significant impact on personal and business taxes at a federal level — and possibly local or state, as well.
Only recently chosen as the Democratic candidate, Kamala Harris hasn’t yet provided many specifics about her proposals or policies as pertains to taxes. She has, however, promised not to raise taxes on individuals earning less than $400,000 annually.
Aside from that, there are a few other possible changes that could come about if Harris is elected. But again, the exact changes are still unknown. They’re also not entirely determined based on who the U.S. president is.
“Since tax legislation originates in the legislative branch, changes in tax law will be largely dependent on who controls the House and Senate, regardless of who wins the presidency,” said Christian Putnam, CPA and CEO of Augur CPA, a tax and accounting firm based in the Washington, D.C. with clients across the United States.
Despite this, Putnam did suggest a few possible tax law changes that could occur if Harris wins the election.
Removal of the Current Local and State Taxes Cap
Back when Donald Trump was in office, he signed into law the Tax Cuts and Jobs Act (TCJA), which brought about some significant changes to the tax code at the time. The TCJA impacted both individuals and businesses with its tax reforms — and more specifically, its tax cuts.
Individual Taxes
Here’s how the TCJA has affected individual taxpayers:
- Most income tax brackets fell slightly. Only the 10% bracket — the lowest bracket — and the 35% bracket stayed the same.
- The standard deduction increased. In 2024, the standard deduction is $14,600 for single filers or $29,200 for married couples filing jointly.
- The child tax credit increased to $2,000.
- Under this law, individuals are no longer required to have health insurance to avoid a tax penalty.
Business Taxes
The TCJA also had an impact on businesses. For example:
- It reduced the corporate tax rate to 21%.
- Pass-through businesses — like sole proprietorships and S-corporations — received a 20% deduction for their pass-through income.
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If Harris Becomes President
For individuals, these tax reform benefits are set to expire in 2025. The changes to businesses, however, are permanent.
If Harris wins, Putnam predicted there will be a removal of the state and local taxes cap.
“The Tax Cuts and Jobs Act of 2017 limited the deduction of state and local taxes to $10,000,” Putnam said. “This limitation disproportionately impacted taxpayers in high-tax states, such as California and New York, which are Democrat leaning.”
This prediction is supported by the fact that, when the TCJA was initially passed, no House Democrats supported it.
New or Stricter Regulations in Tax Preparation
Another possible change under a Harris presidency is in regard to tax preparer regulations.
“Many of the COVID-[era] stimulus programs were implemented through tax policy,” said Putnam. “These programs, such as the Employee Retention Credit, were unfortunately abused by unscrupulous tax preparers and promoters.”
Since July 2024, the IRS criminal investigation has initiated hundreds of criminal cases regarding the Employee Retention Credit (ERC) alone. Fraudulent claims are estimated to come out at an estimated $7 billion.
The increase in fraudulent claims and other scams could cause the government to buckle down further on tax preparers.
“Should Harris win the presidency, it’s likely that the tax preparation industry will be subject to new regulations to curb abuses of tax benefits in the future,” said Putnam.
Some Tax Laws Are Set To Expire
As certain tax laws are set to expire at the end of 2025, that leaves room for potentially new — or continued — policies.
“The Republican tax law changes from 2017 are set to expire in 2025,” said Putnam. “If Harris becomes president, it’s likely that some of these changes will expire or be updated through a major tax bill at the end of 2025.”
It’s possible that Harris will also continue the same policies initiated under the Biden-Harris administration’s FY 2025 budget.
This budget details Biden’s “vision to protect and build on the Administration’s progress and invest in all of America to make sure the middle class has a fair shot and we leave no one behind,” according to a White House statement. “The Budget will lower costs for families, protect and strengthen Social Security and Medicare, and reduce the deficit by making the wealthy and corporations pay their fair share and cutting wasteful spending.”
Among other things, here’s what the FY 2025 budget includes:
- Increased taxes on wealthy taxpayers and major corporations
- Increasing the corporate minimum tax rate to 21%
- Keeping the tax rate the same on those earning $400,000 or less
- Cutting taxes for lower- and middle-income families with children
- Restoring and expanding the Child Tax Credit.
Bottom Line
Any changes to individual and business taxes are still up in the air. Whether these predictions come to pass is dependent on more than who the president is.
“Again, all of the above is highly dependent on who controls the legislative branch,” said Putnam. “A split executive and legislative branch makes these changes less likely or less expansive.”
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out 6 Changes Coming to Your Tax Return in 2025 If Trump Is Elected President.
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