When Donald Trump first became president in 2017, one of his signature legislative victories came from passing the Tax Cuts and Jobs Act (TCJA). The law reoriented the tax code in many ways, such as by slashing tax rates, particularly for high-income earners and corporations.

Yet because the TCJA significantly reduced government revenue and therefore increased the federal deficit, many parts of the law were written to expire at the end of 2025 in order to satisfy congressional rules. Trump and a Republican-controlled Congress find themselves back in power as they decide the law's fate.

The situation is similar to when President Barack Obama faced the expiration of tax cuts passed under President George W. Bush. The Obama administration made most of the tax cuts permanent, while mostly letting those that affected wealthy individuals expire.

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Trump has stated his intentions to not only extend the TCJA but also introduce new cuts, which could reduce what many Americans owe in taxes each year while driving up the federal debt.

While you might not have much direct say in what gets passed in 2025, being up to date on potential changes can go a long way toward optimizing your taxes.

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