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**2025 Tax Law Expirations: What You Need to Know**
As we approach the end of 2024, it's important to start planning for the significant tax laws that are set to expire at the end of 2025. These changes could impact many taxpayers, so it's essential to be proactive in your tax planning. Whether you live in Green Bay, De Pere, or anywhere else, understanding these changes will help you stay ahead of the curve and prepare for what's coming. Let’s take a closer look at some of the key tax laws expiring at the end of 2025.
**1. The Tax Cuts and Jobs Act (TCJA) Provisions Expiring**
The Tax Cuts and Jobs Act (TCJA) of 2017 brought sweeping changes to the U.S. tax code, benefiting both individuals and businesses. However, many of these provisions were temporary and are scheduled to expire at the end of 2025. One notable change is the return of pre-2017 individual tax brackets, which means many taxpayers will face higher tax rates. For example, the current 12%, 22%, and 24% tax brackets are set to revert to 15%, 25%, and 28%.
If you're a resident of Green Bay, now is the time to assess how these tax changes might affect your income. Working with a professional during tax prep will ensure you’re well-positioned to adjust to these higher tax rates and potentially avoid unexpected tax burdens.
**2. The Expiration of Expanded Standard Deductions**
Another important provision under the TCJA was the doubling of the standard deduction. This simplified tax filing for millions of Americans, allowing many to skip itemizing their deductions. However, like other TCJA provisions, this benefit will end in 2025, with the standard deduction likely reverting to pre-2017 levels. For many, this could mean a smaller deduction and potentially higher taxable income.
If you're in De Pere or nearby areas, now is an excellent time to evaluate how this change could impact your tax return. Effective tax prep will be crucial as the expiration date nears, and working with a CPA can help you strategize ways to optimize your deductions before this provision sunsets.
**3. The Child Tax Credit and Family-Friendly Benefits**
The TCJA significantly expanded the child tax credit, increasing it from $1,000 to $2,000 per qualifying child. However, this enhancement is set to expire at the end of 2025. Without an extension, the credit will return to pre-TCJA levels, which means many families could see a reduction in their tax benefits. This change could lead to a higher overall tax liability for families with children.
Families in Green Bay and De Pere should start planning now for these shifts in family tax benefits. Consulting with a CPA can help you understand how this change might affect your finances and prepare for any future adjustments. Early tax prep will be key to navigating these changes smoothly.
**4. The Estate and Gift Tax Exemptions**
The TCJA also increased the estate and gift tax exemptions, allowing individuals to transfer up to $11.7 million tax-free (as of 2021). This exemption is also set to revert to pre-2017 levels at the end of 2025, potentially halving the amount that can be transferred without incurring taxes.
If you live in Green Bay and are considering estate planning, now is the time to start working with a CPA to make sure your estate is handled efficiently. Strategic tax prep can help ensure that you maximize the benefits of the current exemption before the rules change at the end of 2025.
**5. Deductions for State and Local Taxes (SALT)**
One of the most controversial provisions of the TCJA was the $10,000 cap on state and local tax (SALT) deductions. For taxpayers in high-tax states, this cap significantly reduced their ability to deduct property and other state taxes. While this cap has been in place for several years, it is set to expire at the end of 2025, potentially allowing for larger deductions in future tax years.
If you're in De Pere or the surrounding area, particularly if you pay high state and local taxes, the expiration of the SALT cap could offer some relief. Proper tax prep will help you take full advantage of this change if it happens and ensure you’re maximizing your deductions.
**Conclusion: Planning for 2025 Tax Law Expirations**
As we near the end of 2024, it's time to start thinking about the tax law changes that will come into effect at the end of 2025. From the expiration of the TCJA’s provisions to changes in deductions, credits, and exemptions, these shifts will affect taxpayers across the board. Whether you're in Green Bay, De Pere, or beyond, planning ahead will be essential.
By working with a CPA and starting your tax prep early, you can be ready for these changes and position yourself to make the most of the current laws before they expire.
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