Without congressional action before the end of 2025, the tax breaks for individuals enacted during the previous Trump administration will expire. Those were related to marginal rates, the standard deduction amounts, the child tax credit and other provisions. The rules were part of the Tax Cuts and Jobs Act of 2017, a law overhauling income-tax rules for individuals, estates, small businesses and corporations.
Under the Tax Cuts and Jobs Act for the tax years beginning after December 31, 2017, and before January 1, 2026, the standard deduction was nearly doubled for all filing statuses. This led to fewer people itemizing deductions and instead opting to use the standard deduction.
The TCJA significantly changed the standard deduction amounts for individuals and families. The standard deductions before the 2017 Tax Year were $6,350 for single filers, $9,350 for heads of household and $12,700 for those married filing jointly.
After the TCJA (2018-2025 tax years), these amounts jumped dramatically. The standard deductions for the 2024 tax year are $14,600 for those single or married filing separately, $21,900 for heads of household, or $29,200 for joint filers and surviving spouses.
This change aimed to simplify the tax filing process for many individuals and families (Forbes estimates that 90% of taxpayers now choose to claim the standard deduction). Claiming the standard deduction made it possible for many to skip the complicated process of itemizing deductions to potentially reduce taxable income.
The TCJA doubled the estate and gift tax exemption for individuals, from $5.49 million in 2017 to $11.18 million in 2018. Adjusted for inflation, the exemption increased to $13.61 million in 2024. This means individuals can now pass on up to $13.61 million in assets without being subject to federal estate or gift taxes. For married couples, this effectively allows a combined exemption of $27.22 million.
American taxpayers with considerable estates benefit from the larger exemptions. and because this tax can have a significant effect on your beneficiaries, it’s best to formulate your estate plan with a professional tax adviser.
If the TCJA’s changes go away as scheduled, the reversion to the previous smaller standard deduction, higher tax rates, and narrower tax brackets, approximately 62 percent of US tax filers would experience a tax increase. Be aware of the changes coming, consult your tax advisor, pay attention to any new tax changes and plan accordingly.