Five Expiring Tax Breaks That Trump’s New Bill Would Extend — If Not Increase

Tax Cuts and Jobs Act (TCJA) reshaped the federal tax code in 2017, many of its benefits for individual taxpayers were designed to expire after 2025.

Now, with Donald Trump back in the White House and Republicans in full control of Congress, those temporary tax breaks could not only be extended — they might be expanded.

House Republicans recently introduced a draft bill on May 12, nicknamed “The One, Big, Beautiful Bill,” aimed at renewing and enhancing several provisions from the 2017 law.

Here are five key tax breaks that could stick around — and get a boost — under the new legislation:

1. Lower Tax Rates

The TCJA reduced income tax rates through 2025. The new bill would make those rates permanent.

If the bill passes, tax brackets would stay as follows:

  • 10% (unchanged)
  • 12% (instead of 15%)
  • 22% (instead of 25%)
  • 24% (instead of 28%)
  • 32% (instead of 33%)
  • 35% (unchanged)
  • 37% (instead of 39.6%)

Without new legislation, rates will revert to their pre-2018 levels starting in 2026.

2. Bigger Standard Deduction

The TCJA nearly doubled the standard deduction through 2025. The new bill would make that change permanent — and increase it further from 2025 to 2028.

For 2026, standard deductions would be:

  • Single: $16,300 (vs. $8,300 without the bill)
  • Head of Household: $24,500 (vs. $12,150)
  • Married Filing Jointly: $32,600 (vs. $16,600)

3. Enhanced Child Tax Credit

The 2017 law boosted the child tax credit from $1,000 to $2,000 per child, but only temporarily. The new proposal would:

  • Make the $2,000 credit permanent
  • Increase it to $2,500 for 2025–2028
  • Index the credit to inflation starting in 2026

4. Expanded Business Income Deduction

The TCJA introduced a 20% deduction on qualified business income (QBI) for pass-through entities (like sole proprietorships, S corporations, and partnerships). This also applies to some REIT dividends and publicly traded partnership income.

The new bill would:

  • Make the QBI deduction permanent
  • Increase it from 20% to 23% starting in 2026

5. Larger Estate Tax Exemption

Before the TCJA, estates over $5.5 million (single) or $11.1 million (married) were subject to federal estate tax. The 2017 law doubled those thresholds through 2025.

Under the new bill:

  • The higher exemption would become permanent

In 2026, exemptions would be:

  • $15 million for single filers
  • $30 million for married couples

If passed, this legislation would cement some of the most significant elements of Trump’s 2017 tax overhaul — and deliver even deeper tax cuts for many Americans.

 

Source: Money Talks News