In 2017, a Republican lead Congress passed the Tax Cuts and Jobs Act (TCJA), bill that provided welcome tax relief to middle and upper-income individuals and corporations including (adjusting for inflation):

• Lowering Individual Income Tax Rates: This included a reduction in the top rate from 39.6% to 37%.

• Doubling the Estate Tax Exemption: Raised from $6.8 million to $13.61 million per individual, allowing more wealth to pass to heirs tax-free.

• Introducing a 20% Deduction for Pass-Through Businesses: The Qualified Business Income (QBI) deduction offered relief to small business owners.

• Cutting the Corporate Tax Rate: Reduced from 35% to 21%, encouraging corporate investment and growth.

• Increasing the Standard Deduction: Nearly doubling, it rose from $15,750 to $29,200. Taxpayers itemizing deductions went from 30% to 10%.

• Expanding Alternative Minimum Tax (AMT) Exemptions: Reducing the likelihood that middle-income earners would be subject to the AMT.  AMT filers dropped from 5 million to 200,000 households under the TCJA. 

The law also introduced a controversial $10,000 cap on State and Local Tax (SALT) deductions, disproportionately impacting taxpayers in high-tax (predominantly Blue) states like New York, New Jersey and California.

Due to quirks in the legislative sausage-making process, the 2017 TCJA tax provisions came with a 10-year shelf life and are slated to expire on December 31, 2025.  If no action is taken, all brackets, limits, and deductions will revert to pre-2017 levels, adjusted for inflation, creating significant uncertainty for tax and estate planning.  Of particular concern is the estate tax exemption, which is poised to be slashed by half—from $13.61 million to $6.8 million—potentially upending wealth transfer strategies for the Baby Boomer generation.

Following the Republican sweep in the 2024 elections, an extension of the TCJA now seems highly likely. For most taxpayers, this suggests minimal changes to the current federal individual tax brackets, capital gains rates, and estate tax exemptions.

That said, to fulfill campaign promises and accommodate key interest groups, some modifications to the TCJA are likely. What might those changes include?

According to tax expert Ben-Henry Moreland of Kitces.com, the $10,000 cap on state and local tax (SALT) deductions remains one of the most contentious issues in upcoming tax debates. Lawmakers from both parties in high-tax states are pushing to raise the cap—some advocating for an increase to $80,000—while Donald Trump, despite championing the original SALT cap in the TCJA, campaigned to eliminate it entirely.

The stakes are high: the SALT cap generates over $120 billion annually in federal revenue. Any changes to this provision would necessitate offsetting tax increases elsewhere. Moreland suggests Congress might consider reducing exemptions for the Alternative Minimum Tax (AMT) as a “stealth” method to tax high-income earners. This approach could shift the benefit to lower-income taxpayers in high-tax states—effectively a "rob Peter to pay Paul" strategy.

As a side note, a raise in the SALT limit would benefit any taxpayer with property bills over $10,000, including those in low-tax states like Wyoming (if you itemize deductions). 

There are several other proposals being floated, such as eliminating tax on Social Security payments and tips.  Below is a summary of the Taxes and Likelihood of Change (credit to Moreland):

Source:  https://www.kitces.com/blog/2024-election-republican-trifecta-trump-2025-tcja-sunset-tax-planning-tax-cut-and-jobs-act-salt-congress/

If you're a middle- to high-income earner, a business owner, or engaged in wealth transfer planning, the potential extension of the TCJA is likely to be welcome news. The base case assumes the continuation of today's favorable tax rates, with the possibility of additional tax savings under a Republican-led Congress and Presidency.