Overview

The Tax Cuts and Jobs Act (TCJA) of December 2017 rewrote large parts of the individual tax code and introduced changes that still shape individual returns in 2024–2025. Key features — lower tax brackets, a much larger standard deduction, caps on select itemized deductions, the new qualified business income (QBI) deduction, and changes to mortgage-interest rules — remain relevant for planning today. Importantly, most individual TCJA provisions are scheduled to sunset after the 2025 tax year unless Congress extends them (IRS; Tax Policy Center).

What changed that still matters

  • Lower tax rates and revised tax brackets: Individual rate schedules were reduced under the TCJA and are in effect through 2025. Rates and bracket thresholds are indexed for inflation each year (IRS).
  • Standard deduction doubled: The TCJA roughly doubled the standard deduction, which means a larger share of taxpayers now take the standard deduction rather than itemizing. See our guide on the standard deduction for details (FinHelp: Standard Deduction).
  • SALT cap: State and local tax (SALT) deductions remain capped at $10,000 for most filers — a change that affects taxpayers in high‑tax states.
  • Mortgage interest: Interest on new acquisition debt is generally limited to debt incurred after 12/15/2017 on up to $750,000 of mortgage principal (down from $1 million for older debt) for most filers.
  • Personal exemptions eliminated: The TCJA suspended personal exemptions through 2025, which changes household tax calculations.
  • Qualified Business Income (Section 199A): A new 20% deduction for some pass‑through business income (subject to limits and phaseouts) remains an important planning consideration for small business owners.
  • Suspended deductions: Many miscellaneous itemized deductions (e.g., unreimbursed employee expenses) were suspended through 2025.

Practical effects for taxpayers

  • Fewer itemizers: Because of the larger standard deduction, many taxpayers who previously itemized now take the standard deduction. If you’re near the threshold, consider strategies like charitable bunching to maximize itemized deductions (FinHelp: Choosing Between Itemizing and the Standard Deduction in 2025).
  • Timing and multiyear planning: With TCJA’s sunset scheduled after 2025, timing income, deductions, and conversions across tax years can materially change your tax bill. In my practice, I routinely model multiyear scenarios for clients when the sunset or other legislative changes are possible.
  • Homeownership decisions: The mortgage interest cap and limits on home‑equity loan interest impact whether large mortgage interest amounts remain deductible.
  • State tax planning: The SALT cap increases the importance of state tax planning and may influence decisions about state tax payments, estimated payments, and the use of pass‑through entities.

Actionable tips

  1. Recalculate itemizing vs. standard deduction each year — inflation adjustments can change the result. Use our practical calculator to compare options (FinHelp: When to Itemize vs Take the Standard Deduction).
  2. Consider bunching charitable donations into alternate tax years to exceed the standard deduction and maximize itemized deductions (FinHelp: Bunching Charitable Gifts to Exceed the Standard Deduction).
  3. Max out tax‑advantaged retirement contributions (401(k), IRA) to lower taxable income before year‑end.
  4. If you’re a pass‑through business owner, review eligibility for the 199A QBI deduction and phaseout rules with a tax advisor.

Authoritative sources

Professional insight

In my practice helping individuals and small business owners, the two most common shifts since TCJA are (1) more clients taking the standard deduction and (2) greater focus on timing strategies — moving deductions or income across years to take advantage of lower rates or avoid unfavorable phaseouts.

Disclaimer

This article is educational and not individualized tax advice. Rules change and individual circumstances vary; consult a qualified tax professional or the IRS for guidance specific to your situation.

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