Major elements of the changes include reducing tax rates for corporations and individuals, increasing the standard deduction and family tax credits, eliminating personal exemptions and making it less beneficial to itemize deductions, limiting deductions for state and local income taxes and property taxes, further ...
April 10, 2025, the House adopted the Senate's amended version of the budget resolution, which allows $5.3 trillion in deficit-financed tax cuts (the combination of $3.8 trillion of tax cuts assumed to be “costless” under a current policy baseline plus $1.5 trillion in additional deficits permitted), deficit increases ...
President Trump's Tax Cuts and Jobs Act is slated to be in effect from 2018 to 2025. Throughout the tax years within the TCJA period, taxpayers will likely see an increase in their tax cuts. However, by 2025 when the TCJA expires, all individual tax cuts expire too.
The standard deduction increased for 2025 and 2026, and a new temporary “bonus” deduction for adults 65 and older begins in 2025. The child tax credit increased to $2,200 for the 2025 and 2026 tax years; retirement plan contribution limits for IRAs and 401(k)s also increased for 2026.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
Trump Tax Plan Changes: Standard Deduction
The 2017 Trump tax law (TCJA) nearly doubled the standard deduction for all filers, and OBBB bumped them up. If you're a single filer or if you're married filing separately, your standard deduction for 2025 rose to $15,750 under OBBBA.
The 2025 Federal Tax Debate
Much like the 2017 tax law, the new law favors the richest taxpayers. More than 70 percent of the net tax cuts will go to the richest fifth of Americans in 2026, only 10 percent will go to the middle fifth of Americans, and less than 1 percent will go to the poorest fifth.
Under the law, there were numerous changes to the individual income tax, including changing the income level of individual tax brackets, lowering tax rates, and increasing the standard deductions and family tax credits while itemized deductions are reduced and the personal exemptions are eliminated.
The Congressional Budget Office (CBO) estimated in 2018 that the 2017 law would cost $1.9 trillion over ten years, and recent estimates show that making the law's temporary individual income and estate tax cuts permanent would cost roughly another $4.2 trillion through 2035.
Income Tax Act, 2025 to be effective from April 1, 2026. The Act simplifies language, removes obsolete provisions and consolidates and restructures provisions. It Introduces concept of 'Tax Year' replacing 'Assessment Year' and 'Previous Year'.
The bottom 99% also saw an average federal tax rate increase by one percentage point from 2012 to 2013, mainly due to the expiration of the Obama payroll tax cuts, which were in place in 2011 and 2012. However, for income groups in the bottom 99%, the average federal tax rate remained at or below the 2007 level.
Trump ERS would be a dedicated agency, separate from the Internal Revenue Service (IRS), with the sole mandate of overseeing, collecting, and enforcing tariffs and related trade taxes.
The One Big Beautiful Bill Act (OBBBA) or the Big Beautiful Bill (P.L. 119-21), is a U.S. federal statute passed by the 119th United States Congress containing tax and spending policies that form the core of President Donald Trump's second-term agenda. The bill was signed into law by Trump on July 4, 2025.
Donald Trump, previously the president of the United States from 2017 to 2021, campaigned in 2024 on the promise of an economic nationalist system characterized by protective tariffs, lower taxation, and reduced regulations, where income tax would be largely or completely replaced by tariffs on other countries to ...
The proposed tax policies include eliminating taxes on specific income items such as tips, overtime and Social Security benefits. Additionally, they suggest creating an itemized deduction for auto loan interest and imposing taxes on large private university endowments.
increased Child Tax Credit - increased from $2,000 to $2,200 for qualified taxpayers. additional senior deduction (2025 through 2028) - additional $6,000 deduction for taxpayers 65 and older with phaseout for MAGI over $75,000 (over $150,000 for Married Filing Jointly filers)
President-elect Donald Trump campaigned on lowering the US corporate income tax rate to 15 percent. He made the same request in 2017 when Republicans passed their tax cuts, but Congress only cut the federal rate to 21 percent—down from the worldwide high of 35 percent.
The new senior tax deduction of up to $6,000 for single filers and $12,000 for joint filers, was created to help cover taxes on Social Security benefits. Taking the new senior deduction helps to reduce your taxable income, which can mean less tax or potentially an even bigger tax refund when you file your return.
Expiring TCJA Provisions
The following TCJA provisions are set to expire after 2025. Near doubling of the standard deduction, repeal of personal exemptions, and lower value of several itemized deductions, including those for: State and local taxes (SALT)
Some of the major tax changes effective from April 1, 2025, are revised tax slabs, rebate of up to Rs. 60,000, revised ITRU deadlines, calculation of partner's remuneration allowable as a deduction and revised TDS/TCS threshold limits.