Articles & Alerts
The Expiration of TCJA Provisions: What Individual Taxpayers Need to Know
The Tax Cuts and Jobs Act (TCJA) of 2017 introduced several significant changes, many of which are set to expire at the end of 2025, to the U.S. tax code. As this expiration date approaches, it is crucial for individual taxpayers to understand the potential impacts and plan accordingly.
Expiring Provisions
The TCJA brought sweeping changes to the individual tax code. Here are few changes set to expire after December 31, 2025:
Potential Impacts and Considerations
- Income Tax Rates
The TCJA lowered individual income tax rates across all brackets. These rates are scheduled to revert to their pre-TCJA levels in 2026. Individuals, especially high earners, need to anticipate increased tax liabilities.
- Standard Deduction
The TCJA nearly doubled the standard deduction, which simplified filing for many but reduced the benefit of itemizing deductions. The standard deduction will return to its lower pre-TCJA levels in 2026, potentially making itemizing more advantageous again.
- Itemized Deductions
The limitations on itemized deductions introduced by the TCJA significantly impacted taxpayers who previously benefited from deductions such as mortgage interest and medical expenses. In 2026, the pre-TCJA itemization rules will be reinstated.
- SALT Deduction Cap
The $10,000 cap on SALT deductions imposed by the TCJA disproportionately affected taxpayers in high-tax states. When this cap expires, taxpayers will be able to fully deduct their state and local taxes once again. Individuals in high-tax areas should plan for this shift and possibly adjust their state tax withholding or estimated payments.
Understanding these changes and planning ahead can help taxpayers manage their future tax liabilities and optimize their financial strategies. To learn more about how the expiration of these TCJA provisions will impact your tax obligations and what financial options you should consider before these changes take effect, please contact your Anchin Relationship Partner.