what tax cuts expire in 2025 married jointly

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14-11-2024

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Tax Cuts Expiring in 2025: What Married Couples Need to Know

The Tax Cuts and Jobs Act of 2017 brought significant changes to the U.S. tax code, including temporary adjustments to individual income tax rates and standard deductions. Many of these provisions are set to expire at the end of 2025. For married couples filing jointly, understanding these expiring provisions is crucial to planning for potential tax changes in the future.

Key Tax Provisions Expiring in 2025 for Married Couples:

• Standard Deduction: The Tax Cuts and Jobs Act significantly increased the standard deduction for all filers, including married couples. This increase is set to revert to pre-2017 levels in 2026. According to a study by the Tax Policy Center, this could mean a decrease in the standard deduction by $1,600 for married couples filing jointly. (Source: Tax Policy Center)

• Individual Income Tax Rates: The Act lowered individual income tax rates for all brackets. These rates are set to revert back to their pre-2017 levels in 2026. For married couples, this could mean higher tax rates in the future, depending on their income level. (Source: Tax Policy Center)

• Child Tax Credit: While the full amount of the Child Tax Credit is permanent, the enhanced portion of the credit (increased from $1,000 to $2,000) is set to revert to its previous amount in 2026. This could mean a reduction of $1,000 per qualifying child for married couples. (Source: Internal Revenue Service)

• Other Expiring Provisions: Other tax breaks for married couples set to expire in 2025 include:

  • Deduction for medical expenses: The threshold for deducting medical expenses is set to revert to 7.5% of adjusted gross income.
  • Deduction for state and local taxes: The limit on deducting state and local taxes is set to expire.

What Should Married Couples Do?

• Plan for Potential Tax Increases: The expiration of these provisions could result in a significant increase in taxes for married couples. It is essential to factor potential tax increases into your financial planning.

• Consider Strategies for Tax Savings: Explore ways to minimize your tax liability before the provisions expire. This could include making adjustments to your income, deductions, or contributions to retirement accounts.

• Stay Informed: Keep up-to-date on any potential changes to the tax code. The U.S. Congress may decide to extend or modify some of the expiring provisions. Subscribe to reputable tax news sources to stay informed.

• Consult a Tax Professional: A qualified tax professional can provide personalized guidance on how to navigate the complexities of the tax code and help you develop a plan for managing the potential impact of expiring provisions.

Beyond 2025:

The future of these tax provisions is uncertain. While Congress has the power to extend or modify them, the political landscape makes it difficult to predict the outcome. Married couples should prepare for the possibility of tax increases in 2026 and plan accordingly.

Disclaimer: This article is for informational purposes only and does not constitute tax advice. Consult a tax professional for guidance tailored to your specific situation.