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Tax Cuts and Jobs Act (TCJA) of 2017: Sunset Looms with Potential Impact on Taxes and Deduction

(photo: UNC Tax Center)

The Tax Cuts and Jobs Act of 2017 will expire in 2025, potentially causing higher taxes and changes in deductions prompting people to plan ahead and seek advice.

Tax Cuts and Jobs Act (TCJA) of 2017 Set to Sunset

The Tax Cuts and Jobs Act (TCJA) of 2017 reduced income tax rates. If it expires rates may rise leading to higher taxes for individuals and influencing financial planning, according to the report of Finance Buzz.

Potential Impact on Tax Rates

The TCJA lowered income tax rates. If it ends, rates might go back up to what they were before 2017. That could mean more taxes for individuals affecting how much money they have and how they plan finances.

READ ALSO: $390 Settlement: Mercy Health Data Breach Victims Can Claim Compensation For 2020 Incident – Claim It Now!

(photo: Brookings Institution)

Standard Deduction Changes

The TCJA doubled the standard deduction, giving relief to many taxpayers. If it ends, the deduction might go back to what it was before, making some people itemize deductions instead. This changes how people file taxes and plan finances.

State and Local Tax Deductions

If the TCJA ends, it might remove the $10,000 cap on state and local tax deductions, affecting where people live and property ownership. Families could receive fewer tax benefits for children and homeowners might lose mortgage deductions impacting housing choices and investments.

Preparation for Potential Changes

With the TCJA’s fate uncertain, it’s important to plan ahead financially. Talk to an accountant to get ready for possible tax law changes. Being proactive can help reduce the impact of new tax rules on personal finances.

READ ALSO: $3 Million Settlement: Amazon To Pay Up To $565 Each To California Employees For Unpaid Overtime Wages

With the Tax Cuts and Jobs Act nearing its end, it’s important for individuals and businesses to stay informed about potential financial changes. Seeking professional advice can help navigate shifting tax rates, deductions, and credits, ensuring financial stability.

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