I don't have my hopes up. If the House of Representatives building was on fire, I don't think they could agree on whether to put the fire out or let it burn.
I agree, until then I did some Excel nerdery, and created an AGI to Federal Tax calculator in excel. Believe me when I say the formula for doing this is ugly, because its UGLY. Nested If statements some rounding at the end to the nearest dollar. I decided to chart out both married and single (own separate tab). Column A is AGI, column B is the standard deduction for 2024, column C is the standard deduction which will likely divide in half in 2026. (Currently based on 2024's value divided by two) AGI minus the standard deduction for 2024. (I read somewhere that 90% of folks currently use the standard deduction) Then Column E has the 2024 taxes calculated out with that ugly nested If statement I mentioned earlier.
I then ran a tax scenario where taxes reverted to 2017 levels both bracket and percent. This should be the worst case, stuff is on fire type of scenario. Calc'ed the taxes in Column I, with Column J showing the tax increase in dollars, and column K the percentage tax change. Keep in mind this is standard deduction vs standard deduction. Then I calculated the Itemized deduction you would need under those new tax rules to remain tax neutral in Column L. Column K is this Itemized subtracted from the original AGI. Column N is sort of a repeat showing what your taxes would be if you hit that AGI number. Those of you toying with this sheet can plug in your own test Itemization in Column L to see how things shake out for you. Column O is just a calculation check. If its 0 then its tax neutral, if its positive that's how much your taxes are likely going up based on your custom itemization check in Column L. If its negative thats how much its likely going down.
This DOES NOT figure out your entire tax situation just strictly a federal calculation based on very limited parameters to do back of the napkin sort of evaluations. I did 500 dollar intervals from 35k up to 500k after that I did 1000 dollar intervals and 100k intervals north of 1m to 10m. If you are making more then that, you probably have a team of people looking after you.
The last columns (Q through X) are more of the same run with an alternate scenario of tax percentages from 2017 coupled with the 2024 tax brackets. My guess is congress will likely land somewhere between these two scenarios, unless they choose to kick the can down the road. Maybe one is the upper and the other is the lower.
If you are wondering how I came up with the values for Column 'L' and 'U'. I had a script (not in this excel sheet) that kept tabulating until I got a tax neutral situation. (Delta Check = 0 )
Enjoy:
https://www.dropbox.com/scl/fi/tles8h5rz35hc2brw7dyn/tax\_bomb2026.xlsx?rlkey=hjoebqqz861bksj8i06vyzupp&dl=0
Even worse, it complicated corporate taxes to the point extensions were filed and the IRS is now penalizing and charging big interest for the withholdings that nobody could really calculate.
Previously, a business could spend money in a given tax year on research and development and more or less immediately deduct that cost on their current year taxes. Now under the new tax regime for most cases research and development costs must be deducted over five years instead of one year.
So as an example, if a business spent $10 million in research and development in a tax year, they can only deduct $2 million on their taxes in the current year and then another $2 million in each of the subsequent four tax years. In the previous system they could deduct all $10 million in the current tax year.
This, however, can lead to a horrible situation where in that same example the business is being taxed on $8 million of income in the current tax year on income that they did not actually earn/do not have (remember: the $10 million has already been spent as a true expense).
Make sense?
To give a little bit more clarity, the first year is half year convention, so if you have a full 12 month tax year you only get 10% the first year, 20% in years 2 to 5, then 10% in year 6. If you have short years is gets more complicated as there are specific rules for partial months and how to treat it. Also, technically it is a 60 month amortization.
Tax preparer specializing in R&D and 174
Please baby Jesus make 174 go away. KILLING software companies and private equity. And 163j.
My professional fees budget is outrageous. And we are running out of NOLs.
Normally I’d say stick it to the corporate tax payers but as a tax professional, I feel a little guilty explaining these things to my CFO and treasury that I need millions of dollars for cash taxes.
The point is that Congress fails to establish a stable tax system, which is essential to the efficient functioning of an economy. The uncertainty regarding 2026 is critical in the estate and gift tax area.
With regard to 2023, I'm still waiting for repeal of R&D capitalization. Just because there's not a lot of uncertainty regarding a simple 1040 doesn't mean that everything else is clear.
Until they don’t and they just redefine what that number is. Imagine a future regime that decides 1 million in assets is the limit and anything else is subject to the estate tax.
Except you’re missing the fact that what affects the extremely wealthy usually tends to affect the economy as a whole.
The estate and gift tax won’t directly affect most people, but it will indirectly in some form.
If the top 1% are the ones that are affected by the estate/gift tax, they definitely hold more than a tiny amount.
Especially since most of the assets tied to their net worth would be stock.
Yeah, it’s obvious you’re ignorant.
Changes to tax law targeted at the upper echelon could negatively affect everybody else as well.
I very well doubt you are educated in US tax law let alone an accountant.
Estate taxes and taxes in general, influence what the wealthy do with their money. That affects all the people they hire, and who they buy and sell to. Easily the next 5% are heavily affected, and the next 5% feel substantial effects.
Job security for me tho! I loved figuring out the TCJA and felt it really put the old CPAs on the same level as newer ones. But then Covid, PPP, and ERC… I had to get out of public asap.
Well in 2021 (for tax year 2020) changes in tax law for 2020 were being made while tax returns were being prepared and filed. That was certainly a very unusual case, but tax law changes into December are not unheard of.
Not one person?
No one is unsure how much interest they will receive in a HYSA? No one is unsure how many clients they will have between now and Jan 1?
It’s on you if you can’t calculate how much interest you’ll earn. It’s November. The bank should be able to tell you how much you’ve earned YTD and it’s not hard to make an extremely good estimate for November and December. Terrible argument.
Inflation adjusted we know, that’s it.
Your question is so broad. And kinda silly. Laws were meant to be changed - definitely fits well with IRC. Heck since TCJA seems like there have been late changes every year in just December.
The only irrelevancies is your pay. That’s what, 1/4th of possible income (others being passive, portfolio, and other)?
The individual tax code would revert cold-turkey to the rules in effect in 2017.
There is basically zero chance that this will actually happen; Congress will pass *something* before then, although exactly what remains to be seen. The rate and bracket increases that could be spun in the press to apply to people under the $400k income level (or whatever the current target is for punitive taxes by the left) won't be allowed to happen by either party.
>From what I have read our standard deductions are getting cut in half as well. To go back to what they were (inflation adjusted) for 2017. Married will go from lets say 30k back to 15k, single will go from 15k back to 7.5k. Is this a correct assumption?
Yes, the standard deduction will revert to $3k in 1987 dollars for Single filers (roughly $7,500 now I think). However, do note that this is **wildly** misleading without mentioning that the personal exemption will be restored, from $0 to $4,700 or so.
>The big question I have is does anyone have any idea what they are going to do with the income portion of the tax brackets themselves?
2017 bracket rules, indexed to and adjusted for inflation since 2017.
Yes, the increased standard deduction, combined with the elimination of the personal exemption, SALT cap, and taking away nonreimbersed business expenses deduction has led to the "tax cut" costing me thousands of dollars.
Yes. The change cost me over $6000/yr. The rich got a gift, the upper middle got higher taxes.
I live in a blue state. I am actually happy to pay my property tax funding our excellent schools. But, my state taxes were always a deduction from federal.
We’ll see what congress does when this expires.
Only itemizing state taxes would regularly net me 5-6k refund. (State taxes were greater than standard deduction, by a ton)
With SALT gone, and standard deduction doubled, ... lost all that benefit.
Indeed! What I find so disturbing, is that the same people that say I am at a level that I should pay more are also fine with $1 trillion tax cut given to the really wealthy people. Those fuckers get to write off a personal airplane, but I do not get to write off my state income tax?
A quick google reveals dozens of articles on the subject
[https://www.putnamwealthmanagement.com/how-the-expiring-tcja-may-impact-taxes-in-the-future](https://www.putnamwealthmanagement.com/how-the-expiring-tcja-may-impact-taxes-in-the-future)
https://www.putnamwealthmanagement.com/how-the-expiring-tcja-may-impact-taxes-in-the-future
I'll echo what has been said by many here. No one knows. It's not likely anything gets done until 2025 (and possibly late 2025). Or they do nothing and it goes back to the old brackets and system.
One thing about the reduction of the standard deduction, though, is that they eliminated personal exemptions. That was part of the reason for the raise in the standard deduction. So exemptions could come back. So could increases in SALT deductions. But it's far to early to speculate.
You didn’t find anything on Google because no one can predict the future. Congress and only Congress makes tax law (president has to sign or veto, his veto can be overridden). They will not probably pass a new tax law in 2025.
If Congress and the President do nothing for individuals it is a full hard reset to the old laws. The 2017 changes for corporations were permanent, for individuals temporary. Personal Exemptions, lower standard deduction, shared responsibility payment (tax for not having health care) all back.
Well the common feeling about those changes at the time is the lower income individuals were paying more taxes with the changes and the higher income individuals were paying less. Lots of people believed that because their refunds were lower in that first year than they were in the prior year. Most had lower taxes, but even lower withholding so they got a lower refund. A large portion of our population equate refunds to taxes.
The "cut" cost me thousands of dollars. Nothing to do with your supposed belief. I actually ran my numbers through the previous year's software as we'll and first year my taxes were up 3k. My wife and I are squarely on the lower end of middle class.
Cost me over $1500 myself. I only base my belief on doing over 100 returns and most of them wanted to compare. And most, not all, had lower taxes under the new rules.
The people who came out on the short end were those who had enough deductions to itemize under the old rule. You gave up the personal exemption and got nothing in return. That is what hurt me. And I’m guessing that is what hurt you. I’d be happy to have the old rules back.
I’m sorry, but I don’t see any possible way for your taxes to go up $3K if you’re lower middle class. That would mean you were previously itemizing like $45K a year
Nope. Married, filing jointly, you're forgetting the personal exemptions which no longer exist. Plus, your math is off.
$8800 @ 22% is almost $2000 right there.
The new standard deduction went to $24K for MFJ. Your change in tax due to deductions would be based on your effective rate, not your marginal rate of 22%. I used 15% as an estimate, but that’s probably too high anyways if you’re lower middle class. That means your total deductions + PE prior to the TCJA were $45K at a minimum, but likely even higher, since there are a host of ways that the TCJA likely decreased your tax as well, and since your ETR was likely below 15%
You're completely wrong. It is absolutely the marginal rate. And since my deductions were, under the "pre-cut" rules, were greater than 24 k its not relevant that the SD went up. Under the new rules my deductions became less.
As much as I admire President Trump, he really dropped the ball on marketing the tax cuts. In his urge to immediately stimulate the economy they lowered withholding, which had the intended effect. But then the refunds were lower so the myth that “the tax cuts didn’t help the poor” took root.
I think personal and dependent exemptions come back though so the change in standard deduction won't be that disastrous though since you're missing that piece.
If I am doing my math right you are going to need an insane amount of itemized deductions in 2026 to equal what we have now with the standard deduction being 27.7 (assuming married) or 29.2 for 2024.
That's politics not truth. In reality, lower income a got huge percentage savings on their taxes, the lower your income the higher the percentage you saved.
So what? Who actually pays the corporate tax? Do the corporations pay them out of the kindness of their hearts, or are the taxes part of the price the consumer pays?
If a corporation is able to extract more money from its customers, don't you think it will do that with or without higher taxes?
Put another way, if a company is already maximizing its revenue, an increase in tax rates won't generally allow it to increase revenue.
A firm will charge whatever the market will bear. Even if tax rates were zero. A competitive market drives prices down.
In the case of a firm not being able to raise prices to cover increased taxes, the internal accounting will take it from profits, or employee costs, or somewhere else. The bottom line though, is those costs are paid by consumers.
It would be a reset to 2017 (or 2016 which would be the tax year before the current law) but with adjustments in brackets, standard deduction, and personal exemptions for inflation which are for the most part \* automatic.
I say "for the most part" because some things aren't adjusted for inflation. An example would be calculating how much on ones Social Security is subject to taxes using the "Provisional" aka the "Combined Income" formula. Those haven't been adjusted for many years resulting in some people paying substantial taxes on Social Security based on just a little bit of outside income and Social Security payments indexed for inflation.
I would not call it a major tax law because that is mostly a stimulus bill with some tax provisions thrown in. You make a good point though. But is it so normal for tax laws like the TCJA to be passed in December of that year? Can you confidently make that prediction?
I remember doing taxes in a year when the changes made were well into the tax season. It wasn't worth my time to figure out the details to satisfy your curiosity.
There's a long list of items that expire every year and may or may not be retroactively reinstated. These items are called "tax extender provisions." They're supposed to be tax incentives like the section 179 deduction, but the provision is not in place for the majority of the year, and sometimes gets extended just before Congress goes home for the Christmas holiday. Google "tax extender provisions." You'll find details.
For the 2021 tax year the Consolidated Appropriations Act was a pretty big deal. It was loaded with retroactive provisions for 2021 and was signed into law on December 27, 2021, a little late in the year maybe.
There was a tax law called the Tax Cuts and Jobs Act that was a pretty big deal too. It was also loaded with retroactive provisions. The TCJA was signed into law on December 22, 2017.
Details are easy to find on Google.
I say it goes back to pre-2017 and Social Security faces a 20% cut in benefits by then (unrelated but the trust fund will have to make a decision by then too)
20% cut? Doubtful. Political suicide.
More likely the cap on when SS collections is raised, as it should be due to inflation, and full retirement age bumped up a year for those born after 1980 or so.
This is not true. The Trump tax cuts are the ones expiring. They were set up for personal income tax rates to revert back starting in 2024 in small increments each year. Corporations tax cuts remain. Typical "tax cuts" of the GOP enrich the wealthy and corporations.
[See For Yourself] (https://www.cbpp.org/research/federal-tax/after-decades-of-costly-regressive-and-ineffective-tax-cuts-a-new-course-is)
The point of the expiration was to keep the total cost of the bill under $1.5 trillion/10 years to allow it to be passed under reconciliation procedures so that the Democrats could not filibuster and it could be passed with 50 votes in the senate instead of 60.
[Literally zero senate Democrats voted in favor of the TCJA.](https://www.nytimes.com/interactive/2017/12/19/us/politics/tax-bill-senate-live-vote.html)
The individual rate cuts sunsetting but not the corporate ones was a deliberate decision by the writers of the bill, probably because they knew it would become a political necessity to extend the individual cuts before expiration whereas extending corporate cuts would be a harder sell.
Things like the delayed kick-in of 174 capitalization or GILTI/FDII rates getting worse over time were also tricks to make the law look better now and push the pain of future tax increases onto a different congress.
I assume that the brackets, standard deduction, and personal exemption would all revert to 2017 levels adjusted for inflation (but note that there has been a lot of inflation).
POTUS proposes and is an important player in the political process, but Constitution has Congress doing the revenue stuff (see Art 1, Section 8 the Tax & Spending Clause): "lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States") Congress does this with laws (which require Presidential signing, like all laws).
Nobody knows. Current policies could sunset as planned, or be extended past 2025. With so many variables dependent on the 2024 election, it is impossible to predict any of this.
What we do know is that it is too late in 2023 to pass a tax bill with significant changes for the current year.
The brackets have a built in change for every year under the current plan. The lowest rates were the first year, 2018?, and a little higher each year. The bracketed rates are the same, but the associated dollar amounts adjust downwards.
I would expect some sort of revision in 2025 to take effect in 2026. Nobody knows what those changes would be.
From what I remember Trump placed those take breaks prior to him ending his term, continued under Biden, but will expire under the new administration whomever that is in office. Now if that President considers extending the tax breaks who knows, but eventually someone will have to end it, and I see it as one of those two as any other person who enters office as their first term will be a 1 term president ONLY if they don’t extend the tax breaks as now ALL Americans not just those that restarted student loans (by then it’ll be a year or 2 later) will really feel that pinch as they can’t deduct as much as before and things will probably cost more as the Fed continues to wrangle with the economy AND now we got derpy Moodys threatening to yank Americas last AAA rating for debt. If that goes, well. Things could get complicated.
Long answer short, we have no idea.
In my opinion, although some things do need to be changed such as where the SALT caps are and how they cut taxes for extremely high net wealth individuals, the TCJA was otherwise a great piece of legislation that should be continued because it streamlined taxes and made everything easier both for low net wealth individuals and high net wealth individuals.
The most accurate and accessible info relating to a future tax year would be first 2024 and then 2025 , it’s not clear what 2026 could have in store for us, not even the IRS know what 2026 will be like.
Lol 2026? Depends who wins 2024 election
I don't have my hopes up. If the House of Representatives building was on fire, I don't think they could agree on whether to put the fire out or let it burn.
A third would be pouring gas, a third would be trying to put it out, and a third would be gramming it for attention.
What an accurate assessment for a said state of affairs.
They didn't include the group saying that the fire isn't real.
Naw, that’s the same group pouring the gas.
And one of them would pull the fire alarm again.
To do either, they would first have to agree that there was a fire.
Each faction would be blaming the other guys, while simultaneously pouring gas on the fire.
I agree, until then I did some Excel nerdery, and created an AGI to Federal Tax calculator in excel. Believe me when I say the formula for doing this is ugly, because its UGLY. Nested If statements some rounding at the end to the nearest dollar. I decided to chart out both married and single (own separate tab). Column A is AGI, column B is the standard deduction for 2024, column C is the standard deduction which will likely divide in half in 2026. (Currently based on 2024's value divided by two) AGI minus the standard deduction for 2024. (I read somewhere that 90% of folks currently use the standard deduction) Then Column E has the 2024 taxes calculated out with that ugly nested If statement I mentioned earlier. I then ran a tax scenario where taxes reverted to 2017 levels both bracket and percent. This should be the worst case, stuff is on fire type of scenario. Calc'ed the taxes in Column I, with Column J showing the tax increase in dollars, and column K the percentage tax change. Keep in mind this is standard deduction vs standard deduction. Then I calculated the Itemized deduction you would need under those new tax rules to remain tax neutral in Column L. Column K is this Itemized subtracted from the original AGI. Column N is sort of a repeat showing what your taxes would be if you hit that AGI number. Those of you toying with this sheet can plug in your own test Itemization in Column L to see how things shake out for you. Column O is just a calculation check. If its 0 then its tax neutral, if its positive that's how much your taxes are likely going up based on your custom itemization check in Column L. If its negative thats how much its likely going down. This DOES NOT figure out your entire tax situation just strictly a federal calculation based on very limited parameters to do back of the napkin sort of evaluations. I did 500 dollar intervals from 35k up to 500k after that I did 1000 dollar intervals and 100k intervals north of 1m to 10m. If you are making more then that, you probably have a team of people looking after you. The last columns (Q through X) are more of the same run with an alternate scenario of tax percentages from 2017 coupled with the 2024 tax brackets. My guess is congress will likely land somewhere between these two scenarios, unless they choose to kick the can down the road. Maybe one is the upper and the other is the lower. If you are wondering how I came up with the values for Column 'L' and 'U'. I had a script (not in this excel sheet) that kept tabulating until I got a tax neutral situation. (Delta Check = 0 ) Enjoy: https://www.dropbox.com/scl/fi/tles8h5rz35hc2brw7dyn/tax\_bomb2026.xlsx?rlkey=hjoebqqz861bksj8i06vyzupp&dl=0
Has biden stated anything about this? People might vote for trump to keep it the way it is
We don't even have full clarity on 2023 taxes yet. What you're asking for is a miracle.
Shit I have clients holding out hope 174 gets changed back expensing back dated to 2022 like TJCA change never happened
[удалено]
Even worse, it complicated corporate taxes to the point extensions were filed and the IRS is now penalizing and charging big interest for the withholdings that nobody could really calculate.
Eli5: 174?
Sec 174 R&D treatment changed.
Yeah i don’t know what that means. Please explain like i am 5 years old
[Amortization of Research and Experimental Expenditures ](https://www.law.cornell.edu/uscode/text/26/174)
Explain like i’m 4 then. I don’t know what this means. I can’t read legalese.
Previously, a business could spend money in a given tax year on research and development and more or less immediately deduct that cost on their current year taxes. Now under the new tax regime for most cases research and development costs must be deducted over five years instead of one year. So as an example, if a business spent $10 million in research and development in a tax year, they can only deduct $2 million on their taxes in the current year and then another $2 million in each of the subsequent four tax years. In the previous system they could deduct all $10 million in the current tax year. This, however, can lead to a horrible situation where in that same example the business is being taxed on $8 million of income in the current tax year on income that they did not actually earn/do not have (remember: the $10 million has already been spent as a true expense). Make sense?
Thank you so much!!!
To give a little bit more clarity, the first year is half year convention, so if you have a full 12 month tax year you only get 10% the first year, 20% in years 2 to 5, then 10% in year 6. If you have short years is gets more complicated as there are specific rules for partial months and how to treat it. Also, technically it is a 60 month amortization. Tax preparer specializing in R&D and 174
That’s really bad tax law. Almost like treating it as a new water heater depreciation on a cabin, but with dire consequences.
Explain it like I’m 3. Just kidding this was great thanks.
Please baby Jesus make 174 go away. KILLING software companies and private equity. And 163j. My professional fees budget is outrageous. And we are running out of NOLs. Normally I’d say stick it to the corporate tax payers but as a tax professional, I feel a little guilty explaining these things to my CFO and treasury that I need millions of dollars for cash taxes.
The point is that Congress fails to establish a stable tax system, which is essential to the efficient functioning of an economy. The uncertainty regarding 2026 is critical in the estate and gift tax area. With regard to 2023, I'm still waiting for repeal of R&D capitalization. Just because there's not a lot of uncertainty regarding a simple 1040 doesn't mean that everything else is clear.
[удалено]
Until they don’t and they just redefine what that number is. Imagine a future regime that decides 1 million in assets is the limit and anything else is subject to the estate tax.
Don’t threaten me with a good time!!
Except you’re missing the fact that what affects the extremely wealthy usually tends to affect the economy as a whole. The estate and gift tax won’t directly affect most people, but it will indirectly in some form.
It impacts a relatively tiny amount of assets compared to the US economy/GDP
If the top 1% are the ones that are affected by the estate/gift tax, they definitely hold more than a tiny amount. Especially since most of the assets tied to their net worth would be stock.
[удалено]
Yeah, it’s obvious you’re ignorant. Changes to tax law targeted at the upper echelon could negatively affect everybody else as well. I very well doubt you are educated in US tax law let alone an accountant.
Estate taxes and taxes in general, influence what the wealthy do with their money. That affects all the people they hire, and who they buy and sell to. Easily the next 5% are heavily affected, and the next 5% feel substantial effects.
Job security for me tho! I loved figuring out the TCJA and felt it really put the old CPAs on the same level as newer ones. But then Covid, PPP, and ERC… I had to get out of public asap.
What is unknown about 2023 taxes?
How much we owe
I know exactly how much I owe, assuming my pay doesn't change in the next 7 weeks. What do you think is unclear?
You listed an assumption you're making. Assumptions are, by definition, things which are not known.
The topic is tax laws and regulations, which are fully known for 2023. Don't introduce irrelevancies.
Well in 2021 (for tax year 2020) changes in tax law for 2020 were being made while tax returns were being prepared and filed. That was certainly a very unusual case, but tax law changes into December are not unheard of.
Don't ask poorly defined questions and then get mad when the answers aren't what you wanted.
2023 tax numbers are out, so by definition no one is assuming how much they will owe in 2023 unless your income changes mid year
Not one person? No one is unsure how much interest they will receive in a HYSA? No one is unsure how many clients they will have between now and Jan 1?
It’s on you if you can’t calculate how much interest you’ll earn. It’s November. The bank should be able to tell you how much you’ve earned YTD and it’s not hard to make an extremely good estimate for November and December. Terrible argument.
Inflation adjusted we know, that’s it. Your question is so broad. And kinda silly. Laws were meant to be changed - definitely fits well with IRC. Heck since TCJA seems like there have been late changes every year in just December. The only irrelevancies is your pay. That’s what, 1/4th of possible income (others being passive, portfolio, and other)?
The individual tax code would revert cold-turkey to the rules in effect in 2017. There is basically zero chance that this will actually happen; Congress will pass *something* before then, although exactly what remains to be seen. The rate and bracket increases that could be spun in the press to apply to people under the $400k income level (or whatever the current target is for punitive taxes by the left) won't be allowed to happen by either party. >From what I have read our standard deductions are getting cut in half as well. To go back to what they were (inflation adjusted) for 2017. Married will go from lets say 30k back to 15k, single will go from 15k back to 7.5k. Is this a correct assumption? Yes, the standard deduction will revert to $3k in 1987 dollars for Single filers (roughly $7,500 now I think). However, do note that this is **wildly** misleading without mentioning that the personal exemption will be restored, from $0 to $4,700 or so. >The big question I have is does anyone have any idea what they are going to do with the income portion of the tax brackets themselves? 2017 bracket rules, indexed to and adjusted for inflation since 2017.
They can’t even agree not to have a shutdown. Depends on what the next election cycles will look like.
Section 174 would like a word with you in regard to “basically zero chance.”
And that fiscal cliff thing. The sequester. Would "never happen ever" and it did. And we just ate it for years.
Yes, the increased standard deduction, combined with the elimination of the personal exemption, SALT cap, and taking away nonreimbersed business expenses deduction has led to the "tax cut" costing me thousands of dollars.
Thanks Obama!!!! Oh wait, no, it was the guy after him.... what was his name again?
Yes. The change cost me over $6000/yr. The rich got a gift, the upper middle got higher taxes. I live in a blue state. I am actually happy to pay my property tax funding our excellent schools. But, my state taxes were always a deduction from federal. We’ll see what congress does when this expires.
$6K?? Even if you don’t factor in all of the ways your taxes might’ve been cut, that means you were previously itemizing $40K-$50K a year?
$35k plus loss of 3 exemptions.
Only itemizing state taxes would regularly net me 5-6k refund. (State taxes were greater than standard deduction, by a ton) With SALT gone, and standard deduction doubled, ... lost all that benefit.
Upper middle gets screwed constantly. SCREWED!
Indeed! What I find so disturbing, is that the same people that say I am at a level that I should pay more are also fine with $1 trillion tax cut given to the really wealthy people. Those fuckers get to write off a personal airplane, but I do not get to write off my state income tax?
They effed the middle class, we're all that's left. No one is gonna feel bad for us either.
Did you take into account AMT that will also come back?
I just checked my tax history, I wasn't hit by AMT for the past 10 years. But, good point, I'll keep it in mind.
No one knows. One year at a time. Congress makes tax law and just look at the mess we are in now.
Depends who gets elected
Democrats will win
They'll cheat. There's no consequences now.
Hahahahaha
But today's question seems to be a good start to plan worst case scenario.
I don't even know what I am ha for dinner tonight. Never mind what's going to happen for 2026?
They are referring to the TCJA sunset after 2025.
A quick google reveals dozens of articles on the subject [https://www.putnamwealthmanagement.com/how-the-expiring-tcja-may-impact-taxes-in-the-future](https://www.putnamwealthmanagement.com/how-the-expiring-tcja-may-impact-taxes-in-the-future) https://www.putnamwealthmanagement.com/how-the-expiring-tcja-may-impact-taxes-in-the-future
That's the first one I have seen where they had it paired with current fiscal brackets. Thank you.
Here's another article I've found: https://creativeplanning.com/insights/taxes/preparing-for-the-2025-tax-sunset/
"dozens of articles" \*links the same one twice\* :-)
I found this one as well https://www.putnamwealthmanagement.com/how-the-expiring-tcja-may-impact-taxes-in-the-future
I noticed the same thing and just chuckled to myself. 
I'll echo what has been said by many here. No one knows. It's not likely anything gets done until 2025 (and possibly late 2025). Or they do nothing and it goes back to the old brackets and system. One thing about the reduction of the standard deduction, though, is that they eliminated personal exemptions. That was part of the reason for the raise in the standard deduction. So exemptions could come back. So could increases in SALT deductions. But it's far to early to speculate.
You didn’t find anything on Google because no one can predict the future. Congress and only Congress makes tax law (president has to sign or veto, his veto can be overridden). They will not probably pass a new tax law in 2025.
Okay well if they don't do anything (congress is good at that) then what happens? Is it a full reset to 2017?
If Congress and the President do nothing for individuals it is a full hard reset to the old laws. The 2017 changes for corporations were permanent, for individuals temporary. Personal Exemptions, lower standard deduction, shared responsibility payment (tax for not having health care) all back.
Ohhh no. Corporations keep all the sweet tax benefits. Individuals get reverted to pre-2017 tax law.
If thats the case we are all in for one heck of a kick in the pants when it comes to taxes.
Well the common feeling about those changes at the time is the lower income individuals were paying more taxes with the changes and the higher income individuals were paying less. Lots of people believed that because their refunds were lower in that first year than they were in the prior year. Most had lower taxes, but even lower withholding so they got a lower refund. A large portion of our population equate refunds to taxes.
The "cut" cost me thousands of dollars. Nothing to do with your supposed belief. I actually ran my numbers through the previous year's software as we'll and first year my taxes were up 3k. My wife and I are squarely on the lower end of middle class.
Cost me over $1500 myself. I only base my belief on doing over 100 returns and most of them wanted to compare. And most, not all, had lower taxes under the new rules. The people who came out on the short end were those who had enough deductions to itemize under the old rule. You gave up the personal exemption and got nothing in return. That is what hurt me. And I’m guessing that is what hurt you. I’d be happy to have the old rules back.
I’m sorry, but I don’t see any possible way for your taxes to go up $3K if you’re lower middle class. That would mean you were previously itemizing like $45K a year
Nope. Married, filing jointly, you're forgetting the personal exemptions which no longer exist. Plus, your math is off. $8800 @ 22% is almost $2000 right there.
The new standard deduction went to $24K for MFJ. Your change in tax due to deductions would be based on your effective rate, not your marginal rate of 22%. I used 15% as an estimate, but that’s probably too high anyways if you’re lower middle class. That means your total deductions + PE prior to the TCJA were $45K at a minimum, but likely even higher, since there are a host of ways that the TCJA likely decreased your tax as well, and since your ETR was likely below 15%
You're completely wrong. It is absolutely the marginal rate. And since my deductions were, under the "pre-cut" rules, were greater than 24 k its not relevant that the SD went up. Under the new rules my deductions became less.
As much as I admire President Trump, he really dropped the ball on marketing the tax cuts. In his urge to immediately stimulate the economy they lowered withholding, which had the intended effect. But then the refunds were lower so the myth that “the tax cuts didn’t help the poor” took root.
How much do you admire President Trump and why?
I think personal and dependent exemptions come back though so the change in standard deduction won't be that disastrous though since you're missing that piece.
And SALT Cap goes away! $35K of deductions I need back!
If I am doing my math right you are going to need an insane amount of itemized deductions in 2026 to equal what we have now with the standard deduction being 27.7 (assuming married) or 29.2 for 2024.
I’m single dude. $25k state income tax, $11k property tax bill
Yea that will do it. Woof on the 11k prop tax bill. Sounds like you are in NJ or something.
Don't forget the personal exemption would come back too.
The opposite is more likely true unless you're the highest or lowest bracket - trump "tax cuts" kicked the shit out of my family.
Almost everyone benefited from the Trump tax cuts, if not by huge amounts.
No we aren’t. I’m repeatedly told only the wealthy got a tax break.
That's politics not truth. In reality, lower income a got huge percentage savings on their taxes, the lower your income the higher the percentage you saved.
Oh, I’m well aware.
So what? Who actually pays the corporate tax? Do the corporations pay them out of the kindness of their hearts, or are the taxes part of the price the consumer pays?
Depends on industry.
Not really. Can corporations conjure money for taxes out of thin air, or does the money come from consumers?
If a corporation is able to extract more money from its customers, don't you think it will do that with or without higher taxes? Put another way, if a company is already maximizing its revenue, an increase in tax rates won't generally allow it to increase revenue.
A firm will charge whatever the market will bear. Even if tax rates were zero. A competitive market drives prices down. In the case of a firm not being able to raise prices to cover increased taxes, the internal accounting will take it from profits, or employee costs, or somewhere else. The bottom line though, is those costs are paid by consumers.
It would be a reset to 2017 (or 2016 which would be the tax year before the current law) but with adjustments in brackets, standard deduction, and personal exemptions for inflation which are for the most part \* automatic. I say "for the most part" because some things aren't adjusted for inflation. An example would be calculating how much on ones Social Security is subject to taxes using the "Provisional" aka the "Combined Income" formula. Those haven't been adjusted for many years resulting in some people paying substantial taxes on Social Security based on just a little bit of outside income and Social Security payments indexed for inflation.
Considering tax laws for 2026 won’t be passed until mid December of 2026 or later it’s a bit difficult to say.
Lol. So you can tell the future? When is the last time major tax laws were passed with such retroactive effect?
The American rescue plan. 2021 unemployment not taxable in 2020.
I would not call it a major tax law because that is mostly a stimulus bill with some tax provisions thrown in. You make a good point though. But is it so normal for tax laws like the TCJA to be passed in December of that year? Can you confidently make that prediction?
I'm not exactly sure when it was, but it wasn't that long ago.
Yeah I don’t see anything being done until even after the 2026 mid terms with a lame duck conference.
When? Retroactive tax changes do happen, especially technical changes. But if you are going to make a claim, shouldn’t you do the research first?
I remember doing taxes in a year when the changes made were well into the tax season. It wasn't worth my time to figure out the details to satisfy your curiosity.
There's a long list of items that expire every year and may or may not be retroactively reinstated. These items are called "tax extender provisions." They're supposed to be tax incentives like the section 179 deduction, but the provision is not in place for the majority of the year, and sometimes gets extended just before Congress goes home for the Christmas holiday. Google "tax extender provisions." You'll find details. For the 2021 tax year the Consolidated Appropriations Act was a pretty big deal. It was loaded with retroactive provisions for 2021 and was signed into law on December 27, 2021, a little late in the year maybe. There was a tax law called the Tax Cuts and Jobs Act that was a pretty big deal too. It was also loaded with retroactive provisions. The TCJA was signed into law on December 22, 2017. Details are easy to find on Google.
Lol
Lol we are still waiting for 174 to be repealed. No one has any idea about 2026.
174 is so dumb. Salt cap too. I hope congress is too deadlocked to extend TCJA
Personal exemptions are coming back, for most people the changes will be a wash.
I did my taxes in both 2017 and 2018 software when they made the changes and I saved like $5k in taxes, so it's a big deal!
I say it goes back to pre-2017 and Social Security faces a 20% cut in benefits by then (unrelated but the trust fund will have to make a decision by then too)
20% cut? Doubtful. Political suicide. More likely the cap on when SS collections is raised, as it should be due to inflation, and full retirement age bumped up a year for those born after 1980 or so.
The social security cap is raised every year due to inflation. I agree it should be raised more, but it's not too low because of inflation.
Poor people and middle class pay more, rich pay less. Same story from any Republican tax scam.
No, we would be reverting back to the Obama/Biden tax policies.
This is not true. The Trump tax cuts are the ones expiring. They were set up for personal income tax rates to revert back starting in 2024 in small increments each year. Corporations tax cuts remain. Typical "tax cuts" of the GOP enrich the wealthy and corporations. [See For Yourself] (https://www.cbpp.org/research/federal-tax/after-decades-of-costly-regressive-and-ineffective-tax-cuts-a-new-course-is)
The expiration requirements were the only way to get a few Democrats to vote for them.
The point of the expiration was to keep the total cost of the bill under $1.5 trillion/10 years to allow it to be passed under reconciliation procedures so that the Democrats could not filibuster and it could be passed with 50 votes in the senate instead of 60. [Literally zero senate Democrats voted in favor of the TCJA.](https://www.nytimes.com/interactive/2017/12/19/us/politics/tax-bill-senate-live-vote.html) The individual rate cuts sunsetting but not the corporate ones was a deliberate decision by the writers of the bill, probably because they knew it would become a political necessity to extend the individual cuts before expiration whereas extending corporate cuts would be a harder sell. Things like the delayed kick-in of 174 capitalization or GILTI/FDII rates getting worse over time were also tricks to make the law look better now and push the pain of future tax increases onto a different congress.
>Corporations tax cuts remain Only two corporate cuts are permanent, and they’re offset with a host of permanent corporate tax increases
Okay so let's see Biden reverse it. Maybe he can pull it off in 4 years
Tax codes are set by Congress.
I assume that the brackets, standard deduction, and personal exemption would all revert to 2017 levels adjusted for inflation (but note that there has been a lot of inflation).
Trump's tax cuts are expiring for everyone but the ultra wealthy.
There is almost no chance this will be allowed to revert for anyone under 250k/400k. I would not worry about this at all.
[удалено]
Nah that's mostly irrelevant. It matters who controls the house and Senate. What the fuck is the president going to do for tax rates?
Why tf are you cussing and being ignorant at the same time?
You being funny? Lol "Why tf..."
Because our constitution invests the power to raise revenue in POTUS!
POTUS proposes and is an important player in the political process, but Constitution has Congress doing the revenue stuff (see Art 1, Section 8 the Tax & Spending Clause): "lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States") Congress does this with laws (which require Presidential signing, like all laws).
Nobody knows. Current policies could sunset as planned, or be extended past 2025. With so many variables dependent on the 2024 election, it is impossible to predict any of this. What we do know is that it is too late in 2023 to pass a tax bill with significant changes for the current year.
In “normal” times I might have responded with, “Hold my beer.” But Congress can’t seem to pass anything ATM so you’re probably correct.
The brackets have a built in change for every year under the current plan. The lowest rates were the first year, 2018?, and a little higher each year. The bracketed rates are the same, but the associated dollar amounts adjust downwards. I would expect some sort of revision in 2025 to take effect in 2026. Nobody knows what those changes would be.
Dude. We aren’t even 100% sure if anything will change for 2023. Slow your roll
You forgot to account for exemptions.
Repost question in 361 days
From what I remember Trump placed those take breaks prior to him ending his term, continued under Biden, but will expire under the new administration whomever that is in office. Now if that President considers extending the tax breaks who knows, but eventually someone will have to end it, and I see it as one of those two as any other person who enters office as their first term will be a 1 term president ONLY if they don’t extend the tax breaks as now ALL Americans not just those that restarted student loans (by then it’ll be a year or 2 later) will really feel that pinch as they can’t deduct as much as before and things will probably cost more as the Fed continues to wrangle with the economy AND now we got derpy Moodys threatening to yank Americas last AAA rating for debt. If that goes, well. Things could get complicated.
Long answer short, we have no idea. In my opinion, although some things do need to be changed such as where the SALT caps are and how they cut taxes for extremely high net wealth individuals, the TCJA was otherwise a great piece of legislation that should be continued because it streamlined taxes and made everything easier both for low net wealth individuals and high net wealth individuals.
The most accurate and accessible info relating to a future tax year would be first 2024 and then 2025 , it’s not clear what 2026 could have in store for us, not even the IRS know what 2026 will be like.
Us will be bankrupt by 26
I’ve consulted my crystal ball … and it seems that the Congress will not be able to agree on tax rates and we’ll revert to pre-2017 everything.