Prepare Now: The Tax Cuts and Jobs Act (TCJA) is Set to Expire on December 31, 2025
- zlkcpa
- Apr 30
- 2 min read
As we approach the sunset of one of the most significant tax reforms in recent history, it's crucial for individuals and business owners alike to understand what’s changing—and why planning ahead could make a substantial financial difference.
What is the TCJA?
The Tax Cuts and Jobs Act (TCJA), signed into law in December 2017, brought sweeping changes to the U.S. tax code. Designed to stimulate economic growth, the TCJA lowered individual tax rates, doubled the standard deduction, reduced corporate tax rates, and limited or eliminated many itemized deductions.
However, many of the individual tax provisions were temporary and are set to expire on December 31, 2025, unless Congress acts to extend them.
What’s Changing After 2025?
Without legislative action, here’s what could revert or change:
Individual Tax Rates: Tax brackets are set to return to pre-TCJA levels, meaning higher tax rates for many taxpayers.
Standard Deduction: The nearly doubled standard deduction will shrink back, which may result in fewer households benefiting from it.
Child Tax Credit: The expanded child tax credit will revert to prior limits, affecting families with children.
Estate & Gift Tax Exemption: The current historically high exemption will cut approximately in half, increasing exposure to estate taxes.
Pass-Through Business Deduction: The 20% Qualified Business Income (QBI) deduction for certain pass-through entities will expire, raising taxes for many small business owners.
Why Start Planning Now?
For Individuals:
Income Shifting: Consider accelerating income or deferring deductions while rates are lower.
Estate Planning: Utilize the larger exemption now through gifting or trusts to shield assets before the limit is reduced.
Roth Conversions: With lower tax brackets available until 2025, converting traditional IRAs to Roth IRAs may be more tax-efficient now.
For Business Owners:
Entity Structure Review: Reevaluate whether your current business entity (S-Corp, LLC, etc.) will remain optimal post-TCJA.
Investment Planning: Plan capital expenditures and business purchases to maximize deductions while bonus depreciation remains in effect.
Succession & Exit Strategies: Changes in the estate tax law could impact succession planning—get ahead of it with a long-term approach.
The Bottom Line
The end of the TCJA provisions means a potential increase in tax liability for millions. At Kamish & Associates, we’re here to help you stay ahead of the curve. Comprehensive tax planning over the next 20 months can help mitigate the impact and set you up for long-term success.
Whether you're an individual taxpayer or a business owner, proactive tax planning is essential. Let’s work together to make the most of the current tax landscape before these benefits expire.
📞 Contact us today to schedule a tax strategy session!
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