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Trump-Era Tax Cuts Are Coming to an End for Individuals. Here's What You Need to Know
Most tax changes are set to disappear after 2025, but it might not be as bad as you think. Read on to learn how this could affect you.
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So, you thought your taxes were bad this year?
LOL.
Wait till the Trump tax cuts expire next year.
Here is what you need to know
What tax cuts could be going away?
The TCJA made some big changes to the tax code, and several of them were highly beneficial to millions of American families. While this isn't a complete list, some of the most significant tax breaks that could disappear after 2025 include:Read more: we researched free tax software and put together a list of the best options here
- Lower tax brackets: The TCJA generally lowered marginal tax brackets. For example, the top tax rate fell from 39.6% to 37%. The second lowest tax bracket dropped from a 15% rate to a 12% rate. If the TCJA changes go away, the old tax brackets would return.
- Standard deduction: The TCJA roughly doubled the standard deduction, so it would be roughly cut in half after 2025.
- Child tax credit: Not only did the TCJA double the Child Tax Credit from $1,000 to $2,000 per qualifying child, but it also increased the income threshold to qualify from $110,000 to $400,000 for joint tax filers, opening the credit up to more people.
- Qualified business income: Also known as the "pass-through" deduction, this allowed owners of LLCs, S-Corps, partnerships, and sole proprietorships to deduct as much as 20% of their business income.
- Estate tax threshold: Estate taxes only kick in for estates above certain asset thresholds. The TCJA doubled the amount of money that was exempt before the estate tax took effect, and will revert to old levels after 2025.