The Tax Cuts and Jobs Act (TCJA): Key Changes and Expiring Provisions

Andrew Silver

April 2, 2025

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TCJA brought many changes to individual and business taxpayers after being passed in December 2017. The vast majority of Americans received tax cuts as a result of the TCJA, however, not all provisions were made permanent. Many provisions are set to “sunset,” or expire, at the end of 2025 unless Congress takes action to extend them.

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Andrew Silver
Wealth Advisor
Andrew Silver
CFP®, EA

As a wealth advisor, Andrew works closely with clients to understand their goals, priorities, and financial circumstances to develop personalized strategies that bring together financial planning, investment management, and tax planning. Serving as a primary point of contact, he takes the time to understand the details that matter to each client and collaborates with Fragasso’s […]

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This article has been reviewed for accuracy by Fragasso's leadership team and accredited by Andrew Silver to help ensure the information reflects current financial planning and wealth management principles.

Key Features Set to Sunset

Changes to Individual Tax Rates:

TCJA lowered tax rates across the board, with the top rate dropping from 39.6% to 37%. While higher-income earners, on average, received the largest tax breaks, nearly all taxpayers benefitted from these lower rates.

State and Local Tax (SALT) Cap:

Before the TCJA, there was no limit on how much taxpayers could deduct for SALT taxes (state and local income tax, property tax, and sales tax). Under the TCJA, the SALT deduction was limited to $10,000 for both single and joint filers.

Increased Standard Deduction:

The TCJA nearly doubled the standard deduction for all taxpayers. This increase, along with the cap on SALT cap, led to only around 10% of Americans itemizing deductions in subsequent years.

Child Tax Credit:

Families across the country benefitted from the increase in child tax credit from $1,000 to $2,000 per child. Additionally, far more taxpayers became eligible to receive the child tax credit, as income eligibility limits increased significantly.

Estate and Gift Tax Exemption:

The TCJA roughly doubled the maximum amount that can be gifted during life and upon death without incurring federal gift and estate taxes. In 2025, the limit is $13.99 million for an individual (this limit is doubled for a married couple).

Pass-through Business Income Deduction:

The TCJA offered a 20% deduction for qualified business income (QBI) from pass-through business entities such as LLCs, S-corporations, and sole proprietorships.

We will be monitoring developments as 2025 progresses to determine what tax law changes may be taking effect in future years. In the meantime, we believe it is prudent to begin considering strategies to implement before the end of this year in the event we face tax increases beginning in 2026.

TCJA Extensions and TCJA Expirations

Proactive Strategies to be Considered:

Accelerate Income in 2025:

If it appears that you will end up in a higher tax bracket in 2026, you may consider increasing your income before the end of this year to take advantage of being in a lower tax bracket. This may involve converting pre-tax IRA money into a Roth IRA, exercising stock options, or generating capital gains by selling appreciated securities.

Estate Planning:

If you anticipate being impacted by a reduction in the estate and gift tax exemption, you may want to begin exploring gifting or trust strategies now to execute before the end of 2025.

Take Advantage of Current Deductions and Credits:

Those currently benefiting from TCJA provisions, such as QBI deduction and child tax credit, should consider maximizing these benefits in 2025 in the event that they are reduced or eliminated in future years.

As always, reach out to your financial advisor at Fragasso to discuss how these potential changes would impact your situation. We can coordinate with your attorney and tax professional to develop an approach that is customized to your unique circumstances.

Your Questions About the TCJA and Its Expiration

What are the major provisions of the Tax Cuts and Jobs Act?

The TCJA reduced individual and corporate tax rates, doubled the standard deduction, limited state and local tax deductions, and increased the child tax credit. It also introduced a 20% pass-through income deduction for certain businesses.

When are key TCJA provisions set to expire?

Most individual tax cuts under the TCJA are scheduled to expire after December 31, 2025, including lower income tax rates, the increased standard deduction, and estate tax exemptions.

How might tax planning strategies change as provisions expire?

Tax planning may shift to strategies that account for higher future tax brackets, such as accelerating income, maximizing Roth conversions, or utilizing trusts and gifting strategies before expiration.

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