• Trump's 2017 tax cuts are set to expire this year, which could impact Americans' wallets.
• Trump's Tax Cuts and Jobs Act lowered individual rates and doubled the child tax credit.
• Experts shared how individual taxes, along with tax breaks for parents and EVs, could change.

President-elect Donald Trump and the incoming Republican congressional majorities could have a big impact on your taxes next year.

Many provisions from President-elect Donald Trump's 2017 Tax Cuts and Jobs Act are set to expire by the end of this year unless Congress renews the tax bill. On the campaign trail, Trump proposed extending many of the law's provisions and adding more.

"We refer to this next year as the Tax Super Bowl. It's a big one," said Mark Baran, the managing director at the financial and professional services firm CBIZ's National Tax Office in Washington, DC.

If the TCJA is extended, and Trump's new provisions — such as eliminating taxes on tips — are added, many Americans could see their individual tax rates drop, or at least stay low. Additionally, Republicans are eyeing an even bigger increase to the original child tax credit from the TCJA while Biden-era tax provisions like the electric-vehicle credit are on the chopping block.

Trump's 2017 tax package had an immediate effect on many Americans — it brought down individual tax rates for almost all filers, doubled the child tax credit to $2,000 per child from $1,000, and doubled the standard deduction that Americans could claim, among other measures. If the Tax Cuts and Jobs Act isn't extended, more than 62% of filers would face a tax increase in 2026, per an analysis from the Tax Foundation.

"President Trump is committed to lowering the tax burden on the American people who elected him in November with an overwhelming mandate to Make America Wealthy Again," Trump spokesperson Karoline Leavitt said in a statement to BI. "The Trump Administration will be dedicated to ensuring that American workers keep more of their hard earned dollars in their pockets while growing the strongest and most resilient economy the world has ever seen."

"From a planning standpoint, I would love to see the Tax Cuts and Jobs Act extended," said Brian Kearns, a CPA and the founder of the financial planning and tax consulting firm Haddam Road.

Kearns said an extension would mean easier planning and lower rates for clients. "Will it happen? I honestly have no idea."

Here are the biggest changes that could be coming.

Tax rates for most Americans will probably stay low

Baran said that taxpayers could be cautiously optimistic about an extension on the TCJA's reduced individual tax rates.

"The election has created a little more certainty. However, the challenges are still there," he said.

The table below compares tax rates and brackets under the TCJA and if the TCJA expires.

A break for high-income filers in high-tax cities and states is a big question mark

Another provision from TCJA that could save taxpayers money is the State and Local Tax deduction, known as SALT. That provision allows taxpayers in areas with high local taxes — such as prominent blue states like New York and California — to claim those taxes as a deduction.

The deduction was unlimited before the TCJA capped it at $10,000, meaning some high-income residents of those high-tax jurisdictions ended up owing more to the federal government after the law went into effect. That's drawn the ire of strange legislative bedfellows, with Democrats and Republicans in those blue states calling to roll back the cap. But there's already Republican dissent over how to tackle the cap, if at all.

Some Republicans — and Trump advisors — proposed raising the amount to $20,000, giving some relief to Americans paying a lot in local taxes. Trump himself has said he would "get SALT back."

But the cap may end up staying where it is. "It would be great if they raised it because there's a lot of people that are needing relief, but I can't tell you where that's going to head," Scott Brillhart, a partner and the director of tax at Founder's CPA, said.

Promises to wipe out taxes on tips and Social Security could be difficult to keep

The tax experts BI spoke with questioned how feasible proposals like eliminating taxes on tips, overtime, Social Security, and auto loans would be — all of which were talking points for Trump on the campaign trail. Brillhart said eliminating taxes on tips could be a "logistical nightmare for employers."

"I think it would be more complicated than the benefit it would be for a lot of this stuff," he said.

But Kearns said that the impact of reducing those taxes could be felt among a big slice of Americans.

"This matters a lot for all different segments of the population. You're younger, you're waitering or waitressing — no tax on tips, that's a big deal," Kearns said. "If you are receiving Social Security, that's a really big deal to not be paying taxes on your Social Security."

The child tax credit is another wild card

Another provision that could impact many Americans is the child tax credit. Parents could lose out on a $1,000 tax break if the TCJA expires this year. However, at least one Republican lawmaker — Sen. Josh Hawley of Missouri — is pushing a potential increase from $2,000 to $5,000. Vice-president-elect JD Vance also floated a $5,000 child tax credit on the campaign trail.

"You, of course, have to work with Congress to see how possible and viable that is," Vance told CBS's "Face the Nation."

Brillhart said that a higher child tax credit would be "very helpful" for many families and should be seriously considered.

Tax breaks for electric cars are on the chopping block

Additionally, Americans interested in going electric may want to plug in now — at least if they want some tax benefits. Brillhart said that the tax credit of up to $7,500 for electric vehicles that President Joe Biden passed in 2022 could be on the chopping block.

"If that is a deciding factor for you to be purchasing an EV, I'm not telling them to go run out and purchase something, but it's something to consider," Brillhart said.

• The wealthiest taxpayers have many tools at their disposal to pay less tax.
• Some tactics, like creating 1,000-year trusts to shield assets from creditors, are far-fetched but legal.
• Lawyers and bankers to ultra-rich explain how 12 of these rarified techniques work.

Thanks to tax cuts made during the first Trump administration, Americans can give or hand down about $13 million in assets without paying federal estate tax. Only 0.2% of taxpayers have to worry about this tax, and they hire top-notch accountants and lawyers to pay as little as possible.

"This is a wealthy person's playground problem," Robert Strauss, partner at the law firm Weinstock Manion, told Business Insider.

Some of these tax avoidance techniques might be eyebrow-raising, yet they are perfectly legal. For instance, taxpayers can put homes and country homes in trusts that last decades and any appreciation in the property's value doesn't count toward their taxable estate. Life insurance, probably the least sexy area of financial planning, can be used to save tens of millions of dollars in taxes if bought from issuers in the Cayman Islands and Bermuda.

Currently, individuals and married couples can gift or bequeath $13.61 million and $27.22 million, respectively, before a 40% federal estate tax kicks in. That exemption is due to expire at the end of 2025, but it looks likely that it will be extended given the Republican Party's total control of Washington.

Here are 12 little-known techniques that the richest taxpayers use to pay less to Uncle Sam:

Using trusts to give away homes and country houses

Qualified personal residence trusts, better known as "QPRTs," effectively freeze the value of a real estate property for tax purposes. The homeowner puts the primary residence or vacation home in the trust and retains ownership for however many years they choose. When the trust ends, the property is transferred out of the taxable estate. The estate only has to pay gift tax on the value of the property when the trust was formed even if the home has appreciated by millions in value.

QPRTs have become more popular in the past year as interest rate hikes confer another tax benefit. It seems too good to be true, but there are a few strings attached.

Passing wealth to future generations with trusts that last up to 1,000 years

From the Wrigley family behind the titular chewing gum brand to Jeff Bezos' mother, an Amazon investor, some of America's wealthiest use generation-skipping trusts to avoid paying wealth transfer taxes and provide for future heirs.

These so-called dynasty trusts allow taxpayers to pass along wealth to generations that haven't even been born yet and only be subject to the 40% generation-skipping tax once. Many states have eased trust limits to get the business of the wealthy, with Florida and Wyoming allowing dynasty trusts to last as long as 1,000 years, which spans about 40 generations.

The heirs don't own the trust assets but rather have lifetime rights to the trust's income and real estate. These trusts even protect assets from future creditors and shield them in the event of a divorce.

Giving to charity via trusts that also yield income

Charitable remainder trusts (CRTs) allow moneyed Americans to have their cake and eat it too.

Plenty of affluent taxpayers deduct charitable donations from their taxable income, but the ultra-rich can parlay their philanthropy into guaranteed income for life.

Taxpayers put assets in the trust, collect annual payments for as long as they live, and get a partial tax break. Only 10% of what remains in the CRT has to go to a designated charity to pass muster with the IRS.

These trusts can be funded with a wide range of assets, from yachts to property to closely held businesses, making them particularly useful for entrepreneurs looking to cash out and do good.

Holding life insurance policies via trusts to save on taxes and protect heirs from lawsuits

Rich founders with illiquid assets can take out life insurance policies to cover their estate taxes. They get the most bang for their buck if they put the life insurance policy inside a trust rather than owning it directly. The irrevocable life insurance trust (ILIT) collects the death benefit, pays the tax bill, and distributes whatever is left according to the insured individual's wishes. Any payout is also protected from estate taxes, even if the insured's estate and death benefit exceed the exemption.

There are other perks. If the insured wants to make sure that their heirs are protected from creditors or divorcing spouses, they can use ILITs to be doubly safe. While the law varies by state, trusts and life insurance both have strong legal protections.

Using charitable trusts that give the remainder to heirs

Also known as the Jackie O trust since it was used by the late First Lady, a charitable lead trust or CLT makes annual payments to a charity or multiple. Whatever is left when the trust expires goes to a remainder beneficiary picked by the grantor, typically their children.

If the assets within the trusts appreciate faster than an interest rate set by the IRS at the time of funding, the beneficiary can even end up with a bigger inheritance. CLTs can also be used to discreetly transfer wealth while being publicly philanthropic.

"I've seen lawyers use these to plan for mistresses, to plan for children that perhaps the spouse doesn't know about," lawyer Edward Renn told Business Insider.

Taking loans to pay estate taxes

Unlike QPRTs and CRTs, this technique is highly scrutinized by the IRS and comes with a lot of hoops to jump through.

Families that are asset-rich but cash-poor and facing an estate tax bill can either rush to sell those assets to make the nine-month deadline or take a loan.

The estate can make an upfront deduction on the interest of these Graegin loans, named after a 1988 Tax Court case. Further, if illiquid assets make up at least 35% of the estate's value, families can defer estate tax for as long as 14 years, paying in installments with interest, and effectively taking a loan from the government.

Graegin loans are prime targets for auditors and have led to years-long legal battles, but the savings can be worth it for rich families.

Buying offshore life insurance policies

Private-placement life insurance, or PPLI, can be used to pass on assets from stocks to yachts to heirs without incurring any estate tax.

In short, an attorney sets up a trust for a wealthy client. The trust owns the life-insurance policy that's created offshore. The assets in the trust are treated as premiums, and if structured correctly, the benefit and assets in the policy are bequeathed free of estate tax.

It's only relevant to the ultra-wealthy, often requiring $5 million in upfront premiums as well as a small army of professionals to set up and administer, including trust and estate attorneys, asset managers, custodians, and tax advisors.

Transferring depressed assets during a market slump

The down market has one silver lining for high-net-worth individuals. It is an optimal time to create new trusts as people can transfer depressed assets, whether they are stocks or bitcoin, at a lower tax basis.

The long-favored grantor-retained annuity trusts (GRATs) can confer big tax savings during recessions. These trusts pay a fixed annuity during the trust term, which is usually two years, and any appreciation of the assets' value is not subject to estate tax.

GRATs have picked up in popularity in the past year as the Federal Reserve has raised interest rates, which eat into the returns on these trusts.

Stashing assets in trusts for a spouse

The wealthy can save on taxes by putting their riches in trusts before the Trump tax cuts expire, but some don't feel ready to give their fortunes to their kids yet.

Luckily, there is a compromise. Using a spousal lifetime-access trust, also known as a "SLAT," married taxpayers can stash their fortunes in trusts that pay distributions to their spouses rather than giving assets to their kids. The beneficiary spouse can use this cash flow to fund the couple's lifestyle. After this spouse dies, the trust passes to new beneficiaries, typically the couple's children.

Buyer beware: divorce can mean losing those dollars forever. But millions in potential tax savings can be worth the gamble.

Using trusts that pay cash to spouses but keep the assets for the kids

When the wealthy remarry, they often have to balance the needs of their new spouse and their kids from a prior marriage. Trusts can be used to take care of the spouses, but the adult kids want their piece of the pie.

There is a way to make everyone happy. With a qualified terminable interest property trust, also known as a "QTIP," married taxpayers can put their fortunes in trusts that pay distributions such as stock dividends to their spouses. The income-producing assets, however, are untouched, and when the beneficiary spouse dies, everything in the trust is transferred to new beneficiaries, who are typically the adult children of the spouse who funds the trust.

The main benefit of QTIPs is peace of mind. If the beneficiary spouse remarries, they still get the cash, but they can't gift the assets to their new partner.

Transferring business assets to family-limited partnerships at big discounts

Sam Walton, the founder of Walmart, used a family limited partnership or "FLP" to save his kids and wife from paying any estate taxes on multibillion-dollar family fortune.

With an FLP, an individual — often a parent or two parents — pools their business assets, commonly real estate or stocks. As a general partner, the original individual can name their children as limited partners and give them interest in the partnership. The kids get cash distributions from revenue generated by the trust but do not have control over the actual assets. This control is appealing to parents who want to hold the purse strings.

Another sweetener: You can claim a discount on the assets transferred to the FLP and use even less of your estate-tax exemption. Though the IRS scrutinizes these discounts, they can be worth the gamble. The right lawyer can justify a discount of 45% or higher for less liquid assets, such as privately held businesses.

Giving stock to parents and inheriting it back when they die

Wealthy founders who built their businesses from the ground up face hefty capital gains taxes when they cash out. Instead of selling the shares outright, they can save on taxes by gifting their stock to their parents and waiting to sell the stock until they inherit it after their parents' death. These "upstream transfers" take advantage of a tax loophole for inherited assets that boosts the cost basis to its fair market value at the time of inheritance.

This tactic can also be used to save on estate taxes by ultra-rich entrepreneurs who have already used their exemption but have less-wealthy parents who haven't. They can stash the assets in a trust that benefits their parents until their passing and then their children. When the children inherit the assets, the federal estate tax doesn't kick in as long as the grandparents' estate does not exceed $27.22 million.

Lawyers warn that upstream planning comes with risks. Individuals can lose their assets for good if their parents decide to share the wealth with a new spouse or other children.