Is the Tax Cut and Jobs Act Expiring

February 16, 2024

Female accountant reading through changes in Tax cuts and jobs act information

Freelance Writer

The 2017 Tax Cuts and Jobs Act expires in 2025, but it’s not as simple as all the changes reverting to 2016 provisions. That alone would be incredibly complicated, but instead, only certain provisions may be expiring. To help you better prepare for any changes on the horizon, we’re looking at what the implications to the TCJA expiring may be.

Understanding the Tax Cuts and Jobs Act (TCJA)

First, let’s look at exactly what the TCJA is. Enacted in December 2017, the TCJA made sweeping changes to the federal tax codes for both individuals and businesses.

Individual taxes

Income tax brackets

Though the tax brackets were still divided into seven different rates, both the rates and the income thresholds changed.

Pre-TCJA			Post-TCJA
Single Filers	Married Filing Jointly	Tax Rate Percent	Single Filers	Married Filing Jointly	Tax Rate Percent
0 – 9,525	0 – 19,050	10	0 – 9,525	0 – 19,050	10
9,525-38,700	19,050-77,400	15	9,525-38,700	19,050-77,400	15
38700 – 93700	77400 – 156150	25	38700 – 82500	77400 – 165000	22
93700 – 195450	156150 – 237950	28	82500 – 157500	165000 – 315000	24
195450 – 424950	237950 – 424950	33	157500 – 200000	315000 – 400000	32
424950 – 426700	424950 – 480050	35	200000 – 500000	400000 – 600000	35
426700 and over	480050 and over	39.6	500000 and over	600000 and over	37

Standard deduction

The standard deduction increased significantly:

Single filers: 6500 increased to 12000
Joint filers: 13000 increased to 24000
Head of household: 9550 increased to 18000

However, many itemized deductions were either eliminated or significantly reduced.

Child Tax Credit

The Child Tax Credit doubled from 1,000 per qualifying child under 17 to 2,000 per qualifying child under 17, and the TCJA also created a new $500 credit for other dependents, including children over 18 and adult members of the household who the taxpayer supports financially.

Corporate and business taxes

Prior to the Tax Cut and Jobs Act, the top corporate income tax rate was 35 percent. After it went into effect, the rate dropped to 21 percent. Changes also went into effect related to business interest deductions, new investment purchases, and net operating losses.

What Provisions are Set to Expire?

Most of the provisions enacted by the Tax Cuts and Jobs Act that affect individuals will expire on December 31, 2025. This includes reverting the tax brackets, standard deductions, and Child Tax Cuts back to their pre-2017 rates, though some adjustment for inflation will be included. However, more itemized deductions will be brought back or raised which may offset some of the burden on individual taxpayers.

Most of the business and corporate tax provisions are not expiring. The reduced corporate tax rate will stay the same unless future legislation changes it. However, the Qualified Business Income deduction, or Section 199A, that passthrough businesses can use to claim a deduction of up to 20 percent will expire.

The Future of the TCJA

The future of the TCJA is uncertain. Unless Congress passes new legislation, the specific provisions within the Act will expire on December 31, 2025. However, there's always a possibility that some or all these provisions could be extended or even made permanent.

The Bottom Line

The looming expiration of the TCJA provisions brings uncertainty for both individual taxpayers and corporations. To help you navigate these changes, Becker has the CPE you need to stay up-to-date on the latest tax changes, and our Prime CPE Subscription means you have access to the courses you need in the right format for your life and learning style.