By: Juliya L. Ismailov
Last week House of Representatives (by 217-215 Republican majority) passed a budget resolution that was informally approved by President Trump as “one big beautiful bill.” This bill, among various revenue raising and spending proposals, contains tax cuts totaling $4.5 trillion, including extensions of tax cuts that would otherwise expire in 2025 (outlined below).
The tax cuts enacted under the Tax Cuts and Jobs Act (TCJA) of 2017 that are scheduled to expire by December 31, 2025, unless made permanent by current legislative proposals, are:
Section 199A Small Business Deduction of 20% on income of certain qualified small businesses.
Alternative Minimum Tax would again be imposed to curb deductions of wealthy taxpayers.
Estate tax exemption (currently $13.91 million) to be reduced by half to $7 million.
Individual maximum tax rate will increase to 39.6% from 37%.
Standard deduction to decrease from $29,200 for joint filers in 2025 to $16,600.
The maximum corporate tax rate of 21% enacted by the TCJA is not set to expire.
Finally, raising the $10,000 SALT cap, which is set to expire, is viewed as a possible source of revenue to offset revenue loss from making TCJA tax cuts permanent.
The Senate, by 52-48 Republican majority, has also passed its own competing budget resolution.
The two houses of Congress are now facing a long road of budget reconciliation and horse trading.
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