Quick overview

The Tax Cuts and Jobs Act (TCJA), enacted in December 2017, rewrote large parts of the U.S. tax code for individuals, families, pass-through businesses, and corporations. Several of its headline changes — including a permanent cut to the corporate tax rate and a temporary set of individual provisions that sunset after 2025 — continue to affect tax planning today. This article explains the provisions that matter most in practice, how they interact, and practical planning steps to consider based on common client situations.

Major individual provisions that still matter

  • Lower individual tax-rate structure (through 2025 for most brackets). The TCJA reduced marginal rates across most brackets and reshaped the tax tables. Many of those rate changes are scheduled to revert after 2025 unless Congress acts. (See IRS and Tax Policy Center summaries for current bracket details.)
  • Much larger standard deduction. The TCJA nearly doubled the standard deduction when it took effect (for example, to $12,000 for single filers and $24,000 for joint filers in 2018) and indexing for inflation continues to increase those amounts. That change shifted many taxpayers from itemizing to taking the standard deduction; use our practical guides to decide whether to itemize. For more on comparing choices, see our explainer on the Standard Deduction.
  • SALT cap. State and local tax (SALT) deductions are limited to $10,000 per return for individuals ($5,000 for married filing separately). This cap is still in force and has meaningful state-by-state impact, especially in high-tax states. See our deeper article on how the TCJA affects SALT deductions and practical workarounds.
  • Child Tax Credit changes. The TCJA increased the child tax credit to $2,000 per qualifying child (with a refundable portion subject to limits). Subsequent legislation temporarily expanded the credit in some years; always confirm the current thresholds and refundable amount for the tax year you’re planning for. See our Child Tax Credit guide for claiming rules and documentation best practices.
  • Elimination of personal exemptions and changes to dependents and phaseouts. The personal exemption was suspended under the TCJA, which interacts with the larger standard deduction and family tax calculations.
  • Mortgage interest deduction limits. For homes purchased after Dec. 15, 2017, the deductible mortgage acquisition indebtedness limit was reduced from $1 million to $750,000 (married filing jointly), affecting interest-deduction calculations for higher-cost homes.

Sources: IRS, Tax Policy Center, Tax Foundation.

Business and pass-through provisions that matter

  • Permanent 21% corporate tax rate. The TCJA cut the corporate rate from 35% to a flat 21% (permanent). This remains one of the most consequential long-term business changes.
  • 20% qualified business income (QBI) deduction for pass-through entities (Section 199A). Many owners of sole proprietorships, partnerships, S corporations and LLCs can claim up to a 20% deduction of qualified business income, subject to wage, capital, and service-business limitations. This deduction adds complexity to small-business tax planning and retirement-savings decisions.
  • Bonus depreciation and expensing changes. TCJA expanded bonus depreciation for certain property and adjusted expensing rules that affect equipment purchases and capital planning.

Sources: IRS; see professional business tax resources for details on 199A rules and exceptions.

Estate, gift and international provisions

  • Larger estate and gift tax exemption. The TCJA roughly doubled the unified estate and gift tax exemption (effective through 2025, indexed for inflation), significantly reducing the number of estates subject to federal estate tax. Because this provision is scheduled to decline after 2025, estate planning requires periodic review.
  • International tax changes. The TCJA introduced a new territorial-style system with provisions like GILTI (global intangible low-taxed income) and FDII (foreign-derived intangible income) that affect multinational companies and cross-border tax planning.

Why expiration (the 2025 sunset) matters in practice

A core practical issue: most individual TCJA provisions (rates, many credits, and the larger standard deduction at its original structure) are temporary and set to expire after 2025 unless extended. For clients who will be materially affected, I routinely model both scenarios — current law through 2025 and a reversion to pre-TCJA rules — so they understand the potential tax-bracket and effective-rate changes that could occur. For example, when advising clients with high future income expectations or planned asset sales, projecting tax liability under both futures helps decide whether to accelerate or defer income, realize capital gains, or change entity structure.

Real-world examples from practice

  • SALT cap impact: A married couple in California with high state income and property taxes saw their federal itemized deductions drop significantly once SALT was capped. We evaluated whether bunching charitable gifts and prepaying deductible expenses (where allowed) would help, and we implemented an annual charitable-bunching calendar that improved their tax outcome in alternate years. For background on bunching strategies, see our piece on Bunching Charitable Gifts.
  • Pass-through planning: A service-based small business owner with taxable income near the QBI thresholds benefited from a combination of reasonable salary reclassification (for an S-corp election) and maximizing retirement deferrals to lower taxable income and improve the 199A deduction position.

Practical tax-planning strategies that still hold

  • Revisit withholding and estimated tax. Lower rates and changed brackets mean year-end surprises are possible. I recommend midyear withholding reviews, especially after life changes or large one-time income events.
  • Maximize retirement contributions. Pre-tax retirement accounts (401(k), traditional IRA where eligible) remain an efficient way to reduce current taxable income. Roth conversions should be modeled carefully because current, potentially lower marginal rates may make conversions attractive before a future rate increase.
  • Charitable bunching. Because the standard deduction is larger for many households, combining multiple years of charitable gifts into a single year can restore itemization in that year and yield greater tax efficiency overall.
  • SALT planning for high-tax states. Consider consulting a tax professional about state-specific strategies (e.g., state-level charitable funds or passthrough entity electing to pay state-level taxes) where permitted. Our SALT cap workarounds article explains practical options.
  • Estate-tax checkup. Given the temporary doubling of the estate tax exemption, periodic reviews ensure beneficiaries and gifting plans still align with current thresholds.

Common mistakes and misconceptions I see

  • Assuming every provision is permanent. Several of the TCJA’s most impactful individual changes are temporary. I advise clients not to assume rates or deductions will stay the same after 2025.
  • Overlooking interactions. For example, large Roth conversions can change eligibility or phaseouts for various credits and deductions. Model all connected outcomes before executing a major tax move.
  • Neglecting state tax rules. Many clients fixate on federal changes without tracking how state rules respond; some states decouple from federal changes, producing unexpected state liabilities.

Action checklist

  • Run a quick tax-scenario comparing current-year liability under (a) current TCJA rules and (b) a reversion scenario for 2026+.
  • Review withholding/estimated taxes for large or unexpected income changes.
  • Consult a tax advisor if you own a pass-through business and are near phaseout thresholds for the QBI deduction.
  • Revisit estate, gifting, and retirement plans annually or when life events change.

Documentation and sources

Authoritative reviews and current-year details are available at the IRS (https://www.irs.gov), the Tax Policy Center (https://www.taxpolicycenter.org) and professional commentary (e.g., Tax Foundation, Tax Notes). For granular, reader-focused help on related topics, see our guides to the standard deduction and practical SALT responses in How the Tax Cuts and Jobs Act Affects State and Local Tax Deductions. For family credits and documentation, see our Child Tax Credit Explained.

Professional disclaimer

This article provides general information and educational commentary on the Tax Cuts and Jobs Act and is not individualized tax, legal, or investment advice. Tax rules change and the application of the law depends on your particular facts. Consult a qualified tax professional or CPA before making tax elections or large financial decisions.

Closing note from my practice

In my years advising clients through the TCJA-era changes, the most effective outcomes came from proactive, scenario-based planning — not reactive moves after year-end. If your situation includes a high SALT burden, pass-through business income, large retirement or estate events planned around 2025, model both the current-law and sunset scenarios and document decisions with your advisor.

References

  • IRS, TCJA summaries and tax changes (irs.gov)
  • Tax Policy Center, analyses of TCJA effects (taxpolicycenter.org)
  • Internal practice experience and client planning examples