Election Update: What's Next for Taxes?

Hold everything; stop the presses!

There is talk that the Tax Cuts & Jobs Act (TCJA) of 2017 may get extended.

With Republicans in control of the legislative and executive branches, most agree that tax reform will be part of the federal budget process in 2025.

Will the individual income tax rates get adjusted?

Will the state and local tax (SALT) deduction remain capped?

How about the alternative minimum tax? And what about estate taxes?

I would expect that some TCJA provisions might get extended, some modified, and perhaps others get abandoned as Congress debates the issues. I would also anticipate that certain corporate tax rules will be revisited, including the qualified business income deduction for 20 percent of qualified pass-through income.

But to better understand the challenge of tax reform, the Tax Foundation estimates that making the individual, business, and estate provisions permanent would add about $4.25 trillion to the deficit from 2025 to 2034. Part of Congress’s job will be debating ideas about how to offset any tax law changes.

Bottom line: I’ll keep you posted about what’s going on at Capitol Hill, but I would also encourage you to stay in touch with your tax, legal, and accounting professionals if you have specific questions about the TCJA and your taxes. It might be best to stay proactive while keeping one eye on the legislative process.

^{TaxFoundation.org, November 13, 2024}