The Tax Cuts and Jobs Act (TCJA), enacted in 2017, was a significant overhaul of the U.S. tax code. Key provisions included reducing the corporate tax rate to 21%, adjusting individual tax brackets, increasing the standard deduction, and capping the state and local tax (SALT) deduction at $10,000.
Many individual tax cuts under the TCJA are set to expire at the end of 2025. Without congressional action, approximately 62% of filers could face tax increases starting in 2026.
In 2025, President Trump and congressional Republicans are working to make these tax cuts permanent. The proposed extension includes additional tax breaks, such as eliminating taxes on tips, Social Security income, and overtime pay. However, the plan faces challenges due to its projected cost of up to $4.6 trillion over a decade and internal disagreements within the Republican Party, particularly concerning spending cuts to offset the tax reductions.