As Donald Trump prepares for his return to the White House, American taxpayers are watching anxiously to see what will happen to the trillions of dollars in tax breaks scheduled to expire at the end of 2025. The expiration isn't a surprise: It was written into Trump's signature tax legislation from his first term, the Tax Cuts and Jobs Act (TCJA), signed into law in 2017. The TCJA's provisions included a permanent lower corporate tax rate, as well as temporary lower income tax rates that came with a sunset date of Dec. 31, 2025.
Those income tax cuts resulted in a 1% to 4% reduction in all but the lowest of the seven tax brackets imposed under the current IRS regime. If Congress does not pass a law to extend the reduction, the higher rates will snap back into place, as will older provisions that set the bar lower for estate taxes. The nonpartisan Tax Foundation estimates 62% of filers will pay more if this occurs.
