There were many provisions of the Tax Cuts and Jobs Act (TCJA) that were scheduled to sunset at the end of 2025. Following is a listing of some of the provisions for individuals that have been made permanent by this Act:
- Personal income tax rates and brackets are now permanent
- Capital gains rates remain the same, the brackets will be adjusted annually for inflation
- The increased standard deduction is now permanent
- Personal exemption amounts are now permanently repealed
- Child tax credit will increase to $2,200, adjusted annually for inflation, and are still subject to phase-outs. However, at least one parent must have a social security number along with the dependent child.
- The Pease limitations on Schedule A are eliminated permanently. There will be some adjustment for taxpayers at the highest marginal tax rate.
- Casualty and theft loss repeal is now permanent, with the exception of those affected by an area deemed a federal disaster area by FEMA
- Miscellaneous deductions subject to the 2% threshold are permanently repealed
- The federal estate tax exemption amounts have been made permanent at the increased levels, with the 2026 exclusion amount at $15,000,000 and adjusted annually for inflation.
Next week I will address the areas of no tax on tips or overtime.
