If the Tax Cuts and Jobs Act of 2017 (TCJA) expires at midnight on December 31, 2025, your tax situation could be drastically altered. It is worth considering how these changes could impact you and plan now to avoid unnecessary surprises later.
According to USA Today, nearly every taxpayer will be impacted in one way or another by the expiration of the TCJA. Implications for taxpayers include:
- The increased standard deduction disappears; you could need to itemize again.
- Tax rates will revert to their 2017 rates for all tax brackets.
- Child tax credits change.
- W-2 employees working from home could resume tax deductions for home office and travel expenses.
- Homeowners will be able to deduct mortgage interest up to $1M (up from $750K).
Experts suggest taking steps now to prepare. Consider accelerating income into 2024 and 2025 to take advantage of the current lower rates, or think about a Roth conversion to lock in lower taxes now.
If you are interested in proactively planning for how these changes could possibly impact your personal tax situation, please reach out to your accountant. We want to help make your life #LessTaxing!