This new year of 2025 is likely going to bring us some big changes. One question of particular concern to us – and, we assume, to our readers – pertains to changes to the tax code the incoming administration may foster.
In particular, the Tax Cuts and Jobs Act of 2017 was the signature achievement of President-elect Trump’s first administration.

However, due to the bill’s having been passed via the budget reconciliation process, many of the tax cuts for individual taxpayers (and some concerning only business taxpayers) are due to sunset at the end of this year.

The President-elect campaigned to retain most of these tax cuts, either by extension or by making them permanent. However, it remains to be seen whether he actually achieves this ambitious goal in 2025. The incoming Republican majorities in the U.S. Senate and the House of Representatives makes this more likely, but it is by no means a certainty.

Here are some of the TCJA’s provisions set to expire at midnight on December 31, 2025, what President-elect Trump has proposed for them, and what will happen if they are not extended.

Income Tax Rates

The TCJA reduced the top income tax rate from 39.6% to 37% and made changes to the income limits which fall into most brackets.

The Republican platform includes the goal of making the TCJA changes permanent.

For comparison, below are the tax brackets for pre-TCJA 2017 and post-TCJA 2025.

Tax Brackets 2017 v 2025

Unless the TCJA’s provisions are extended or made permanent, as of tax year 2026 the brackets will revert to 2017’s classifications, and so will the income limits, adjusted for inflation.

Alternative Minimum Tax

While the TCJA retained the Alternative Minimum Tax (AMT), it considerably eased the burden for millions of Americans.

• The TCJA, for the tax years 2018 through 2025, rescinded the requirement for 2017 and prior that taxpayers had to add back personal exemptions, interest on home equity debt (if not used to buy or improve the home), and most Schedule A miscellaneous itemized deductions before calculating their AMT liability.
• Under the TCJA’s provisions, the AMT income exemption amounts were raised from 2017’s $84,500 for married joint filers, $54,300 for single filers, and $54,700 for married couples who filed separately. For 2025, the exemptions are $137,000 for married couples filing jointly, $88,100 for single filers, and $68,650 for married separate filers.
• For high earners, one of the most significant changes to the AMT was the dramatic increase in the phaseout thresholds for the income exemptions listed above – in 2017, the phaseout on AMT exclusions started with incomes above $160,900 for married joint filers and $120,700 for single filers. The phaseout thresholds for 2025 are $1,252,700 for married joint filers and $626,350 for single filers.

SALT Deduction Cap

The TCJA limited the federal deduction for state and local taxes (SALT) to a $10,000 maximum.

SALT encompasses state and local income taxes, sales tax, and some property taxes, including some real estate and most personal property taxes.

Real estate taxes which are not deductible are those which are not “uniform for all real property in the jurisdiction at a like rate.”

Examples of non-deductible property taxes include:

• Assessments for special benefits, such as those for new sewers or sidewalk improvements, for a particular neighborhood or district, which are not assessed against all real estate properties in the district.
• Transfer (or stamp) taxes on the sale of property.
• Estate and inheritance taxes.

Taxpayers may deduct state taxes, plus either local income tax or local sales taxes – not both local income and local sales taxes.

Currently, the incoming administration has indicated it hopes to allow this cap to expire as of December 31, 2025, as it is scheduled to do.

No matter whether he SALT cap lapses, we would recommend keeping meticulous records of local sales taxes paid, in order to ascertain whether a deduction of local income tax or local sales tax is more advantageous to you.

Capital Gains Taxes

The TCJA made, effectively, no change to the taxation of short-term capital gains (gains on sales of assets held for less than one year), which remain taxed as ordinary income tax rates.

For long-term capital gains (assets held over a year before disposal) and qualified dividend taxation, prior to the TCJA (i.e., for tax years prior to 2018), these taxes were applied to ordinary income tax rate brackets.

• If your ordinary income fell within the 10%- or 15%-income tax brackets, no tax on long-term capital gains or qualified dividends was payable.
• If your income fell into the 25%, 33%, or 35% tax brackets, you incurred tax liability of 15% of the gains.
• For taxpayers subject to the highest bracket of 39.6%, the capital gains tax rate was 20%.
• For those taxpayers with adjusted gross income (AGI) of over $200,000 ($250,000 for married couples filing jointly), an additional net investment tax (NIT) of 3.8% was levied.

The TCJA enacted the following changes to taxation of long-term capital gains and qualified dividends (adjusted to reflect inflation adjustments as of 2025):

• Zero tax liability for those with incomes of $47,025 or less ($94,050 for married joint filers).
• For those with incomes between $47,026 and $518,900 ($94,051 and $583,750 for married joint filers), the tax is calculated at 15%.
• Long-term capital gains for those with incomes of $518,901 and above ($583,751 for married joint filers) are taxed at 20%.
• The NIT, and the income levels at which it was assessed, remained unchanged. This threshold is not subject to indexing for inflation.

President-elect Trump has proposed making the lower TCJA capital gains and qualified dividend taxes permanent.

All these are currently scheduled to sunset as of December 31, 2025, with the old rules and brackets, adjusted for inflation, set to come back into effect starting with tax year 2026.

These are only a sampling of the many tax-related proposals set forth by either President-elect Trump, the Republican party platform, or both.

Let Rigby Financial Group help you make tax-savvy plans, for whether the TCJA provisions (or some of them) sunset or are extended or made permanent. We are also well-aware of numerous other ways in which the tax proposals of the incoming administration might help you save money.

Please click here to email us directly – our tax expertise is broad and deep, and our commitment to helping you hang onto your hard-earned money equally so.

Until next time –

Peace,

Eric