These 6 taxes could go away under President Trump

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There aren't many Americans who enjoy thinking about their taxes, but the truth of the matter is that tax planning throughout the year can make your life a whole lot easier come tax time.

Tax planning is especially important considering that about 80% of all Americans receive a refund from the federal government in a given year. A simple adjustment of your federal tax withholding, for example, could result in your getting a raise with each paycheck, as opposed to waiting until next year to get a lump-sum refund from the IRS that earned no interest.

RELATED: 10 common things we've all said when filing our taxes:

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10 things we've all said while filing our taxes
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10 things we've all said while filing our taxes

"It's only January, I have plenty of time!"
You're relaxed, you're casual, what even are taxes anyway? You don't care! It's so far away that filing taxes isn't even remotely on your radar, to be honest.

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"The imminent act of filing is upon me and I literally have nothing ready..."
Tax season is now approaching and that creeping anxiety about getting everything done on time is starting to set in. It's essentially biting at your heels and you know you have to get moving.

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No words. Just emotional paralysis.
You're screwed. You need to start doing your paperwork but you physically do not know where to even begin. It's time. It's happening.

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"I HAVE A MILLION THINGS I NEED TO DO, WHY ARE THERE SO MANY PAPERS AND QUESTIONS, SOMEBODY HELP ME!"
That anxiety you felt creeping in earlier? Now it's full-fledged onset. This stage is often accompanied by screaming out loud, pulling hair, crying, etc.

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"Wait, did I get all of my papers in? Did I check that one box correctly? Does it look like I'm trying to evade some of these taxes? What if I go to jail? Can I go to jail for that? WHO WILL FEED MY DOG WHEN I AM IN JAIL?!"

It's like handing in an exam in school and wishing you could grab it back and double check your answers one more time.

Who was that celebrity you heard about that went to jail for tax evasion? Because now you're convinced that's totally going to be you.

Spoiler alert: as long as you did everything to the best of your knowledge and ability, you probably won't go to jail. And even if you do, you'll find someone to walk your dog.

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"I got this, I'm almost done, a few more papers and I'm in the clear. I just have to pound through the rest of it. Go me!"

"Go you" is right! Now you're on cruise control and you're on track to get everything done well and on time. You're unstoppable in the delight of the world that is tax filing.

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"Thank god that's over with, now I can relax! What to do with all this stress-free free time!"
Finally, relief. Your papers are filed and sent out into the universe. It's off your back at last. Now on to more important things, like Netflix.

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"When is my return coming? Is this going to be my life for the rest of my life? Yep, it is. So about that return..."
Now, you wait. You want that money. And the inevitable truth that your life will now be a neverending cycle of filing taxes and waiting for your return.

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"SCORE my return was so much better than I expected! I'm buying a new dress. Or five. Probably five, why not?"
You're on a total life-high now. The possibilities of what you can spend your return on seem endless and even if you don't, having a nice bonus hunk of cash in your pocket feels pretty good. It made all of that stress completely worth it.

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"Honestly filing wasn't even that bad this year. And now I don't have to think about it anymore. Well at least not for another year. But no use in worrying about that now!"
Alas, acceptance. You know you'll fall victim to the vicious cycle again when next year rolls around. But truthfully, you wouldn't have it any other way. Okay, you obviously would. But you'll never change your procrastinating ways!

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However, tax planning in America is probably a few months away from a big shift, and consumers should be aware of it. Electing Donald Trump as president came as a surprise to many Americans, and his policies could throw a curveball into what most taxpayers have been used to for close to a decade.

Understandably, a lot could change between what Trump has said on the campaign trail and what actually happens once he gets into office. It's no secret that he and some of his Republican colleagues have clashed over certain ideas, which could slow the legislation process. However, having Congress and the presidency unified under a single party could very well mean that big tax changes are around the corner.

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Image source: Ninian Reid via Flickr.

These taxes could go away under President Trump

Based on Trump's various tax proposals, six taxes could wind up being eliminated, four of which would go away as a result of repealing and replacing the Affordable Care Act.

  • Medical device excise tax: The medical device excise tax is a highly controversial 2.3% tax on the revenue of medical device companies. It's particularly disliked since it taxes top-line sales as opposed to end-result profits, and it indiscriminately taxes devices that range from highly specialized heart valves to everyday products like bandages and gloves sold in bulk to hospital chains. It was only expected to cover between 2% and 3% of the total cost of the ACA over a 10-year period, so if Obamacare, as the ACA is more commonly known, is indeed repealed, the medical device excise tax would be gone as well. The medical device excise tax is currently suspended for two years but would presumably be reinstated in 2018 if Obamacare is left in place.
  • Net investment income tax: The Net Investment Income Tax, or NIIT, is a component of Obamacare that would disappear if the law were repealed. The NIIT is a 3.8% tax on investment income for individuals with modified adjusted gross incomes in excess of $200,000, and joint filers over $250,000. According to the IRS, gains from the sale of stocks, bonds, and mutual funds, gains from the sale of investment real estate, and gains from the sale of interests in partnerships and S corporations are all included in the NIIT.
  • Medicare surtax: A 0.9% Medicare surtax was also added when Obamacare was passed as a tax on wages for upper-income earners. Typically, the Medicare payroll tax is 2.9%, which is split down the middle between you and your employer (unless you happen to be self-employed, in which case you pay it all). This works out to you each paying 1.45%. However, once an individual hits $200,000 in wages, the 0.9% surtax kicks in for a total payroll tax of 2.35%. This tax would go away if the ACA is repealed.
  • Cadillac tax: Lastly, the Cadillac tax would be bid adieu if Obamacare were repealed. The Cadillac tax is the ACA's high-cost tax plan that implements a 40% excise tax on employer plans exceeding $10,200 in premiums per year for individuals and $27,500 for families. Though this tax isn't set to take effect until 2020, if Trump has his way it'll never see the light of day.

Frustrated With Taxes
Image source: Getty Images.

Beyond Obamacare, two additional taxes are on the chopping block with Trump as president.

  • Estate tax: The estate tax (also known as the death tax) could also go the way of the dodo. The estate tax is a relatively small contributor to annual federal revenue, since it only applies to estates in excess of $5.45 million per individual or $10.9 million for a couple. Estates below these levels are exempt. Trump has gone on the record multiple times as stating that the 40% estate tax rate is double taxation, and he firmly believes that eliminating it would help preserve family wealth.
  • Alternative Minimum Tax: The Alternative Minimum Tax, or AMT, could also disappear. The AMT is a supplemental income tax imposed by the IRS on well-to-do individuals who've used a variety of tax loopholes to lower their effective tax rate to an artificially low level. Trump's tax plan is all about simplicity, and the AMT simply gets in the way of that simplicity.

Once again, it's important to emphasize that what Trump proposed during his campaign and what actually gets passed into law could be very different. Nonetheless, taxpayers should be prepared for what could be our first major tax reform in quite some time.

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