In December 2017, President Trump signed the Tax Cuts and Jobs Act (TCJA) into law, aiming to reshape the tax code and bolster economic growth.

As 2025 approaches, the focus shifts to the TCJA’s expiring provisions, sparking concerns about their future impact on individuals, businesses, and the economy.

The TCJA brought sweeping changes to the US tax code, sparking economic growth, job creation, and providing tax relief for individuals and businesses. To establish competitiveness on the global stage, adjustments were made to individual and corporate tax rates and deductions, adding more funds into hardworking Americans’ pockets. Post-TCJA, businesses flourished with increased profits, driving workforce expansion. Meanwhile, individuals experienced reduced tax liabilities, leading to higher disposable income.

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As we near the end of 2023, the uncertain fate of the TCJA approaches closer, potentially rolling back provisions to their previous state by December 31, 2025. Some significant provisions on the sunset horizon include:

1. Individual Tax Rates and Brackets: Tax brackets were lowered, dropping the top marginal rate from 39.6% to 37%.
2. Standard Deduction Increase: The TCJA nearly doubled standard deductions, offering extra relief for individuals and families. For 2022, single taxpayers enjoyed a $12,950 deduction, while married couples could claim $25,900.
3. State and Local Tax Deduction (SALT): Expiry of the TCJA might allow larger deductions for taxpayers with higher state income or property taxes. The current cap is set at $10,000.
4. Child Tax Credit Increase: The child tax credit was expanded, doubling to $2,000 per child under 17, benefiting more families.

The destiny of these provisions rests with policy decisions. Leaders must choose whether to extend these provisions or allow them to simply expire. Allowing them to expire could harm taxpayers by raising taxes, reducing disposable income, and stifling economic growth. In the interim, proactive tax planning with your accountant is essential to maximize these provisions while they last.

If you lack a tax plan, it’s never too late to create one. Contact us for assistance and find relief from your worries. Your financial future is our priority.

Guirguis & Gibbs Inc. is located at 27819 Smyth Drive Floor 2. Valencia, CA 91355. Give us a call at (661) 209-3287.

*Mark Guirguis is a Registered Representative of Cetera Financial Specialists LLC, member FINRA/SIPC. Cetera is under separate ownership from any other named entity. For a comprehensive review of your personal situation, always consult your tax and/or legal advisor. Neither Cetera Financial Specialists LLC nor any of its affiliates offer tax or legal services.

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