Signed into law on December 22, 2017, the Tax Cuts and Jobs Act (TCJA), known as the Trump tax cuts, contains several changes to individual tax rates.

When 2025 draws to a close, so will many of the sweeping Trump-era GOP tax breaks established by the Tax Cuts and Jobs Act (TCJA) of 2017. While the legislation made some tax cuts to corporate profit permanent, lowered individual tax rates will expire on December 31, 2025, and revert to pre-TCJA levels.

While the TCJA made some tax cuts permanent, it made others temporary. However, the tax change largely depends on which party controls the White House and Congress after Inauguration Day 2025.

The cuts can be kept by Republicans or rewritten by Democrats. Also, a divided government could agree on a bipartisan compromise. Nevertheless, the change will affect taxpayers of every political persuasion.

In a RealClearPolitics editorial, Julio Gonzalez, CEO and Founder of Engineered Tax Services, Inc., warns of a “harsh reality” facing Congress. “We are in a situation in which many American families and businesses are hanging on by a thread,” Gonzalez said. “Letting the non-permanent provisions of the TCJA expire could be catastrophic to our overall economy and the well-being of many working families.”

Although it kept seven income brackets, the TCJA lowered tax rates across the board and restructured bracket spans. Hence, it made them more agreeable under the TCJA. Except for those who were at 10% (those making $11,000 or less) and 35% (those earning $231,251 to $578,125) tax rate levels before 2018, all income tax rates decreased when the new laws came into effect.
Under the TCJA, the standard deduction nearly doubled for all filing statuses. Consequently, fewer people itemize deductions and instead opt for the standard deduction. Also, the TCJA significantly changed the standard deduction amounts for individuals and families.

The top individual tax rate dropped from 39.6% to 37% under the terms of the Tax Cuts and Jobs Act (single filers making $578,126 and over), the 33% bracket fell to 32% ($182,101-$231,250), the 28% bracket to 24% ($95,376-$182,100), the 25% bracket to 22 ($44,726-$95,375) and the 15% bracket to 12% ($11,001-$44,725).

This bracket backslides will mean that every American needs to reassess their spending and tax returns to pay 1% to 4% more in personal taxes unless provisions are extended, revised or made permanent over the next months.

Under the Tax Cuts and Jobs Act for the tax years beginning after December 31, 2017, and before January 1, 2026, the standard deduction was nearly doubled for all filing statuses. This led to fewer people itemizing deductions and instead opting for the standard deduction.

The TCJA significantly changed the standard deduction amounts for individuals and families. The standard deductions before the 2017 Tax Year were $6,350 for single filers, $9,350 for heads of household and $12,700 for those married filing jointly.

After the TCJA (2018-2025 tax years), these amounts jumped dramatically. The standard deductions for the 2023 tax year are $13,850 for those single or married filing separately, $27,700 for those married filing separately and surviving spouses and $20,800 for heads of household.

This change simplified the tax filing process for many individuals and families.
Claiming the standard deduction makes it possible for many to skip the complicated process and potentially reduce taxable income.

American taxpayers with considerable estates benefit from larger exemptions, and because this tax can have a significant effect on your beneficiaries, it’s best to plan ahead for it in your estate plan if you think your estate may trigger it.

However, the estate tax exemption jumped in 2017, allowing taxpayers with sizable estates to benefit when transferring property to heirs.

The TCJA doubled the estate and gift tax exemption for individuals, from $5.49 million in 2017 to $11.18 million in 2018. Adjusted for inflation, the exemption was $12.06 million in 2022 and increased to $12.92 million in 2023.

This means individuals can now pass on up to $12.92 million in assets without being subject to federal estate or gift taxes. For married couples, this effectively allows a combined exemption of $25.84 million.

If Congress fails to pass a tax bill in time, one of the changes that will affect the average American is the expiration of the TCJA’s lower tax rates. The Tax Cuts and Jobs Act lowered the tax rate for nearly all income brackets.

Those married filing a joint return in a 12% tax bracket ($22,001 to $89,450) will increase to 15%. Also, those in a 22% tax rate ($89,451 to $180,000) will increase to 25% from 22%.
Families will also see the child tax credit, which was doubled to $2,000 under the TCJA, revert to $1,000 per child.

One of the major changes that will affect many small businesses and the self-employed is the elimination of the qualified business income (QBI) deduction.

The QBI “is a deduction of up to 20% for pass-through businesses such as partnerships and S corporations,” according to Joshua Youngblood, a senior tax adviser. “This also includes sole proprietorships.”

Self-employed people who might qualify for the deduction include gig economy workers, artists, Etsy sellers, contractors, restaurateurs, freelancers and various small business owners, according to tax services company Jackson Hewitt.

Also, one business-related TCJA change that won’t expire at the end of 2025 is the flat 21% corporate tax rate. Before the 2017 tax code change the top rate was 35%, according to Youngblood.

Despite the broad changes to the tax code, experts recommend that people should not put a lot of energy into planning just yet. If the TCJA tax bill appears likely to expire, Youngblood says some taxpayers may want to realize any sizable investment gains before the tax rates increase.

Besides taking a look at any rapidly growing investments, business owners should work with a tax adviser to review the structure of their businesses. They should also
create a plan to maximize QBI deductions before the deduction expires.