What’s Still on the Table for Tax Policy in 2025?
With the Trump administration back in office, several tax proposals are once again being discussed—and while none have become law yet, they could significantly impact long-term financial planning. Many of these center around the expiring provisions of the 2017 Tax Cuts and Jobs Act (TCJA), set to sunset at the end of 2025.
Here’s what’s currently being proposed:
- Extending the 2017 TCJA provisions, including lower individual income tax rates (10% to 37%), which would otherwise revert to higher pre-2017 levels in 2026
- Making the 20% Qualified Business Income (QBI) deduction permanent for eligible business owners
- Lowering the corporate tax rate from 21% to 20%, with an even lower 15% rate for U.S.-based manufacturing companies
- Raising or eliminating the $10,000 cap on SALT (state and local tax) deductions, which could benefit taxpayers in high-tax states
- Preserving the current estate and gift tax exemption, which is roughly $14 million per couple in 2025 but set to fall to around $7 million in 2026 without legislative action
- Potentially eliminating taxes on Social Security benefits, though this remains controversial given the projected $2.3 trillion cost to the program and earlier insolvency risk
- Replacing parts of the income tax system with increased tariffs, though this remains more of a broad campaign idea than a concrete legislative proposal at this stage
While the direction of policy is becoming clearer, nothing is final. These proposals would require Congressional approval, and the path forward is still uncertain—especially in a closely divided legislature.
What does this mean for you? We’re in a critical planning window. If new legislation passes, changes could show up as early as your 2025 tax return. If nothing passes, many current tax benefits will expire at the end of 2025, triggering significant shifts in income, estate, and business tax planning.
At Birch Street, we’re watching this closely and modeling both scenarios—so you can make thoughtful, informed decisions now, rather than react later.
Click here for more information on what to expect if the current laws are allowed to sunset at the end of 2025—and what steps may make sense in the second half of the year.
As always, we’re here to help you plan with clarity—not guesswork.
