Trump REVEALS Tax *Stimulus* [Full Breakdown]

Hey everyone, me Kevin here. In this

video, we're going to go through a first

look of Donald Trump's new tax plan

currently released with a House mockup

for budget reconciliation. Now, we're

going to have to get through the budget

reconciliation rules. So, maybe not all

of this is actually going to make it

through when the final version of the

bill the House and Senate end up passing

since in order to actually pass this.

It's unlikely you're going to get

Democrats involved. So, you're going to

have to pass this through

reconciliation. In other words, you get

the 51 vote majority and boom, you can

slam dunk this tax bill. But here's so

far what's included. Uh, first of all,

we're reducing excise taxes on silencers

to $0. So in case you wanted a

suppressor for your firearms, $0. We're

also going to be increasing the debt

limit at least by about $4 trillion just

so we don't have to go back and forth

with uh debt limit negotiations every

single fiscal year or kick the budget

can down the road all the time. Uh then

we'll get into actual documents. I'm

going to go in reverse order here

because I actually think it's most

entertaining to go in reverse order

here. So first we're going to terminate

the clean energy vehicle tax credit. In

other words, if you are going to buy an

electric vehicle, the $7,500 tax credit

ends at the end of

2025. Now, that's actually a little bit

of a boon to Tesla because Tesla in Q4

got a really big surge of orders uh for

people who thought that the tax credit

would expire in 2024 and basically

immediately expire in 2025. It looks

like presumably Elon was able to get

this to expire at the end of 2025. So,

you got a little bit of a bridge here.

Nice little win for Tesla there. Great

job to everybody involved there. Uh, but

that electric vehicle tax credit as

Donald Trump promised will be going

away. So, I think a lot of the plan is

really designed uh to come from the

angle of, hey, Donald Trump made

promises and here's what we're doing to

fulfill those promises. And you'll see

some of them are in line with this. Some

of them are surprises in terms of more

than we expected. Some of them a little

less like the no cash on tips part.

We'll talk about that in just a moment.

And so far, I haven't seen the no tax on

social security portion yet. But I did

see that seniors over 65 would be able

to increase their standard deduction by

an additional $4,000 over other non

seniors. So, I think that's how they're

trying to address that. uh and in sort

of the fairest way I think is their POV.

I'm not entirely sure about that, but

that's what the doc has so far. We've

also got uh for opportunity funds, they

got a mention in this for those of you

interested in real estate. I was

actually surprised you didn't really get

any kind of like expanded opportunity

zone tax credits or anything here. You

just got more reporting requirements,

which is probably a good thing, but not

much in the way of expansion there. you

did finally get in health savings

accounts. I love my health savings

account. I threw it all in Tesla stock

and it's done very well over the last

few years, but uh health savings

accounts originally were only available

for people with catastrophic health

plans and that's now expanded to include

bronze and catastrophic health plans.

So, it should open up that high

deductible health plan eligibility.

These are really cool, by the way,

because if you put, let's say, $10,000

into a health savings plan, uh you get

to write off that $10,000 uh as a tax

deduction, right? Because you're funding

into an HSA. Uh then, and and there are

limits. I'm just using 10K as an

example. There are limits to how much

you can put in. That can grow tax-free

as long as as you're using it for a

qualified medical expense, which could

be a whole host of things, including

fertility treatments, which is kind of

wild because

ordinarily fertility treatments would

not be taxdeductible. But in this case,

through a health savings account, you

would have the tax deductibility of the

money up front, tax deductibility on on

basically the growth uh because you're

taking it out for a qualified medical

expense. and then you're paying for

something essentially in a tax with with

tax-free money. HSAs are great. Uh I

actually I wonder if my link still

works. I haven't pitched them in a

while, but I had a referral if you go to

metaven.com/hsa. Yeah, it still works.

Oh, that's crazy. Me

tv.comhsa. Uh that was a paid still is a

paid sponsor of the channel. Well,

through an affiliate uh relationship

when I refer people to them. But that's

where I set it up and it was really easy

to set it up. So I'd encourage you check

them out. Uh great expansion here on

HSA. So that'll be really good. A lot of

people don't use it because they don't

have a high deductible health plan, but

bronze is going to expand that audience,

especially for younger individuals who

would be more likely to have a bronze

plan. I don't actually have a bronze

plan anymore. Uh but that's also because

now we have a lot more little young

children who need a little bit more

help. Uh but anyway, here's also uh an

employer credit coming for health

coverage. So this is interesting because

for the first year of coverage that you

provide uh health plans, you would be

able to as a business claim $100

multiplied by the number of months for

which the employee is enrolled during

the first year in the credit period. So,

it's kind of like an extra little tax

deduction for businesses to provide

health insurance plans to their

employees, which is cool because the tax

or the business can write it off as an

expense and then the employee doesn't

have to pay taxes and then buy health

insurance, right? So, it kind of is a

little bit of a win-win there. They're

also going to open this thing called

MAGA contribution pilot program. Now,

this appears to be some form of a

savings account, and it would be a

one-time credit, a tax credit you would

get of $1,000, but it's only for

children born between, it looks like

after December 31st, 2024 and before

January 1st, 2029. So, basically during

Trump's term, almost everything that's

added in here requires a social security

number. I have not seen any mentions of

tax benefits that go to people with

taxpayer identification numbers. So, it'

have to be a social rather than a tin.

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know meet Kevin sent you uh in this MAGA

savings account. To me, it sounds like

almost like a retirement account, but

you kind of open up this savings account

for a brand new child essentially. So,

trying to incentivize uh children. Okay,

that makes sense. This is something

we've heard on the campaign trail as

well. So that sounds logical uh and

aligns with what Trump has promised.

Then uh this is interesting too.

Additional elementary, secondary, and

homeschool expenses treated as qualified

higher education expenses for purposes

of 529 accounts. All right. In English,

if you've ever done a 529 health uh or

sorry, um educational savings plan for

like college expenses or whatever, now

you're also going to be able to include

professional credentiing and

homeschooling. Now, both of those are

awesome because it really expands your

ability to use that 529 plan throughout

the rest of your life. Say in the future

you want to become I'm guessing we have

to verify all this obviously and the

bill still has to pass. This is just a

draft in the house. I'm guessing like,

hey, I want to become a pilot. Okay, you

could use a 529 plan towards that

professional credentiing or I want to be

a doctor or a lawyer or whatever. Uh,

doctor, a lot of that is obviously

school related, but what if maybe you

want to be a real estate agent? Maybe

you could use this to become a white

collar professional uh and become

credentialed as a white collar

professional and therefore you could use

a 529 plan to spend on that credentiing

and homeschooling. I mean, that's just a

big shout out to obviously wealthier

people who who are homeschooling, which

is usually you find that amongst

wealthier individuals who couldn't

previously use 529 plans for that.

There's also an enhanced adoption

credit, which will now basically take

the $5,000 adoption tax credit that

exists and make it refundable.

Quick explanation. When somebody says a

tax credit is non-refundable, it means

you have to owe at least $5,000 in taxes

to offset that $5,000 in taxes. But what

if you are broke and you make no money

and you have zero taxes, but then you

adopt the child? I, you know, obviously

questionable as to whether or not you

should adopt the child if you're broke,

but but let's just say for whatever

reason you owe zero taxes, okay? I don't

know, maybe you you lost money in a

business or something, like you got the

money to support a family, but you lost

money in business or something, right?

Well, you could uh now take uh if you

owed zero on your personal taxes and you

adopted a child, you could get a $5,000

check for adopting the child. So, it's

basically a refund. Kind of like the

COVID STEMI checks. Those were

technically refundable. Well, some of

them were kind of interesting. There's

also uh and this is all just like first

glance at some of this stuff. Extension

of uh paid family and medical leave

credits for employers uh to essentially

provide more uh credits to their

employees. And employers are also

getting um more tax credits for

qualified child care expenses. So, if a

business has, let's say, a child care

facility on site, or if you're a small

business and you pay all of your

employees a certain amount for uh

nannies or for, I don't know,

educational expenses for children, then

uh that tax credit for businesses is

actually going from 25% to 40% for

qualified businesses, up to 50% for

small businesses, up to

$600,000 in credits. for small

businesses. Uh small businesses being

those defined as making under $25

million in gross receipts, not net,

gross receipts per year. Uh and then

keep in mind there are aggregation

rules. So typically, you know, if if one

owner has let's say multiple businesses,

you would generally have to have the

same child policies amongst all the

various different businesses. So you

can't sort of like carve out, you know,

the the benefits you want to give to one

businesses but one business but not to

another. That's the point of the

aggregation rule at least. Uh, no tax on

car interests. So, this is going to be

for qualified passenger vehicle loan

interest between basically 25 6 7 and 8

uh for a personal vehicle. So, it can't

be a fleet sale, can't be per uh a

commercial vehicle, so not so great for

businesses. Can't be salvage title. uh

and you can only uh write off or pay

basically no I mean take the deduction

basically on the amount of interest uh

for any taxable year not to exceed

$10,000. So, it's kind of I mean, if

you're paying 30% on the tax rate, you

got $10,000 of interest for a car, which

honestly is quite a lot, but I mean, if

you're paying I guess, you know, I mean,

$10,000 in interest per year, that would

work out to $833 of interest per month.

I mean, maybe somebody's paying that. I

mean, if that represents, you know, 7%

interest on a car, uh, times 12, that

would be like $140,000 car. Okay, so

that seems like it' be a little

expensive, but I guess you could have a

higher interest rate as well, you know,

if you got a 10, 12 or whatever. But

anyh who, if you buy a car, you could

write off up to $10,000. So if you paid

30% in taxes, it's like $3,000 in

savings. Another little savings plan

here. So another opportunity if you're

going to finance a new car. Then you've

got uh the extra deduction for senior

citizens. again over um 65 years old,

extra $4,000 standard deduction if you

make less than 75k as an individual or

150k joint. I think that's why I'm not

seeing the tax on social no tax on

social security part, but maybe maybe

I'm missing that. No tax on qualified

overtime as long as you are not a highly

compensated employee who makes more than

155k or uh you're a 5% owner of the

business. uh any of the excess on that

overtime would just be taxed at uh the

as if that compensation was earned at

your regular wage. So if your regular

wage is $30 an hour uh and then your

overtime is $45, you would only pay

taxes on that $30 an hour even though

you're collecting 45. So that's actually

pretty big. Uh, and you know, I expect

some of these limitations might expand,

but that's actually pretty decent for

those uh, working, you know, long hours

and and overtime. Uh, no tax on tips.

This is an interesting one. It's only

cash tips. So, uh, you know, cash tips

received by an individual in an

occupation which traditionally and

customarily received tips before 2025.

So they're purposely saying that, you

know, so it's like, "Hey, real estate

agent, I'm going to pay you a dollar of

a commission and $20,000 as a cash tip."

You know, that's not customary. So

they're trying to like gate that from

happening. But it also doesn't seem like

well, it doesn't last longer than the

next four years, 25, 6, 7, and 8. But it

doesn't appear to apply to credit card

tips, which like you go to a restaurant

or whatever, most of those aren't cash

tips. So, this means if you leave, you

know, if this passes, it might make

sense to start like keeping a lot more

like5 and $10 bills in your wallet. If

if you even carry a wallet, maybe you

start carrying a wallet because now all

of a sudden, if you put, let's say, a

$10 tip down, that's kind of like giving

somebody, you know, a $13 tip, right?

So, like you can kind of cash adjust for

it. Whereas, if you put $13, let's say,

on a credit card and they had to pay,

you know, 30% in taxes or whatever, it'd

be slightly less than $10. So that's

interesting. The uh for the rich folks,

the estate and gift tax exemptions are

getting permanently increased from 5K to

15 or sorry 5 mil to 15 mil. Oh, and

they're also increasing the uh what's it

called? Um tax cut and jobs act to make

it a a permanent rather than an expiring

at the end of 2025 uh tax cut and jobs

act. Haven't seen anything on aviation

yet, by the way. I want to look at

depreciation and uh aviation. And we'll

look at those in just a moment. But uh

here we have an extension of the

qualified business uh deduction. That's

actually going to increase the benefit

for escorps, partnerships, real estate

investment trusts, etc. Basically pass

through entities from a 20% disc uh you

know, write off to

23%. That's kind of cool. Also

increasing the child tax credit to a

permanent

$2,000. That doubles Ivanka's

$1,000. Children must be under 17, must

have a social, must be a dependent. They

can't file their own tax return, citizen

or resident, uh under 400k uh income as

a joint filer to be able to qualify for

this. Uh and that will be the tax credit

will actually be temporarily $2500 per

child. So, I mean, if for some crazy

reason you had seven children, $2,500

times seven children, that'd be

$17,500 as a tax credit to offset the

amount of money you owe in taxes, not as

a deduction. Credit credit is worth a

dollar for dollar. It's really, really

good. Uh, if your income's under 400K

here. So, very interesting. And again,

$2,500 per year through 2028 and then

down to a permanent increase of 2K. So,

that one's pretty pretty impressive as

well. Uh, and then here's the permanent

sort of extension. And there's always

this joke I wrote here that Republicans

will never let temporary tax cuts or

credits expire because they're

effectively tax increases. However, they

are doing that to um uh the uh what's it

called? Um oh man, what did they just

cover? The EV tax credit. Oh, we started

with that. So, I don't remember that.

But yeah, the only reference to aviation

is on page 253 and it talks about uh

some form of it looks like deductions

for certain types of maybe energy

efficient or like uh you know certain

aviation fuels like related to hydrogen

and credits related to that. But I don't

see anything about like aircraft

depreciation getting extended uh you

know sort of special depreciation rules.

But I could be wrong. Oh wait, hold on a

sec. What is this?

Make rural America and Main Street grow

again. Extension of tax cuts and jobs

act reforms for rural America. Extension

of special depreciation allowance for

certain property. Okay, I sort of

thought about this while I was looking

at this video, so I wanted to see this

here. I don't exactly

know what they're referencing here

regarding special property, but it is

listed under

uh the uh rural America portion here.

So, we'll have to see what this is. and

deduction for R&D. So, some expansion of

these uh special deduction

allowances. All right. Well, we'll have

to do some more work. Again, this is all

under this tax relief for rural America

and Main Street section here. I don't

see anything regarding aviation yet. I

know some people were waiting to buy you

like planes or boats or whatever,

thinking there would be new expanded

depreciation items. I did see bonus

depreciation come in for sound recording

and music studios. So, there were

definitely some niche things and you

know, this text has only been out for

about an hour now. So, it's still a

little early in terms of getting all of

the details of this, but this is already

pretty comprehensive. So, make sure you

subscribe and I will keep going through

this and looking for more uh uh

information on this. Oh, take a look at

this section here. increased dollar

limitations for expensing of certain

depreciable business assets. 179 is is

changed from a million to $2.5 million.

2.5 to

four

for Yeah. Again, also unclear

exactly for which item this is. So,

we'll figure that out. But there are

some small modifications.

Not a lot in here on those bonus

depreciating appreciation items just

yet. I'll keep doing some more research,

but I wanted to get you that first look.

If you found that helpful, consider

subscribing to the channel. And folks,

we'll see you in the next one. Thanks so

much. Goodbye and good luck. Why not

advertise these things that you told us

here? I feel like nobody else knows

about this. We'll we'll try a little

advertising and see how it goes.

Congratulations, man. You have done so

much. People love you. People look up to

you. Kevin Praat there, financial

analyst and YouTuber. Meet Kevin. Always

great to get your take.