2025 starts with one set of federal tax rules. But there very well could be major changes. Odds are decent this year for notable tax legislation. Most of the key tax provisions affecting individuals in the 2017 Tax Cuts and Jobs Act expire after 2025, including lower income tax rates and wider tax brackets, higher standard deductions and bigger child tax credits, and the larger lifetime estate and gift tax exemption. Additionally, Donald Trump has made tax changes a priority on his legislative agenda. If lawmakers act as expected, we could see legislation sometime this year, most likely in the second half of 2025.
We believe most changes in any new tax law enacted this year would take place prospectively, starting in 2026. That makes the most sense, given the 2025 expiration of the 2017 ta aw. Also, note that Trump won't get everything in his tax wish list, given the extremely slim Republican majority in the House and a non-filibuster proof GOP majority in the Senate. Additionally, there is the massive $36 trillion federal debt to consider.
