Plan now for the expiration of the TCJA

The tax cuts currently in place are set to expire in 2025.? The time to plan is now.

The Tax Cuts and Jobs Act (TCJA) was signed into law in 2017 and it changed the tax code for individuals by lowering tax rates across income levels and reducing the tax burden for many Americans.?

Although there were some permanent provisions signed into law, many of the changes are set to expire in 2025, barring further legislative action.

Expiring after 2025:

Reduction of individual income tax brackets—if rates revert to their previous levels, many people will likely see significant increases in their taxes.?

Higher standard deductions—if not extended, the amount of the deduction will be cut by almost half.

Certain itemized deductions

Medical expense spending thresholds will increase

Estate tax exemptions will be decreased significantly—if cut, estates greater than $5.49 million will be subject to estate tax.

Understanding how these changes will impact your individual situation is critical when planning for the most tax efficient income in retirement.

Whether the changes will be made permanent remains to be seen.

But one thing is for certain.? The time to plan is now.