The Tax Cuts and Jobs Act (TCJA) of 2017, a significant piece of legislation enacted during the Trump administration, included numerous tax provisions affecting both individuals and businesses. A key characteristic of these provisions is that many are set to expire at the end of 2025. This sunset provision means that without congressional action, the tax landscape will undergo significant changes in the year 2026. These potential alterations are often referred to in shorthand by the year they are scheduled to take effect.
The scheduled expirations carry substantial implications for the economy. For individuals, the changes could affect income tax rates, standard deductions, and various tax credits. Businesses could see alterations in the corporate tax rate and deductions for capital investments. The impact extends to government revenue and the national debt, influencing future fiscal policy decisions. Understanding these potential shifts allows for informed financial planning and economic forecasting.