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Major Tax Changes Coming Soon!

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Major Tax Changes Coming Soon!

Are you ready for big tax news? Let's break it down in simple terms!

Remember when Congress made some big changes to taxes in 2017 with the Tax Cuts & Jobs Act (TCJA)? Well, those changes aren't permanent. Most of them will end after 2025. Plus, there are other tax rules from the Covid pandemic that are also set to expire soon. But what happens next? Will Congress extend them, let them expire, or make new rules? Nobody knows for sure, especially with 2024 being an election year.

Here's a look at some important tax stuff that's set to expire soon. It's essential to know about these changes because they might affect you and your money.

Estate and Gift Tax:

This one's a biggie! Under TCJA, the amount of money you can give away without paying taxes on it doubled. But that's only until 2025. After that, it might go back to the old rules.

Personal Exemptions:

Before TCJA, families got a tax break for each person in the family. TCJA put that on hold until 2025.

Standard Deduction:

If you don't itemize your deductions, you get a standard deduction. TCJA doubled that, making it easier for lots of people to skip itemizing.

Home Mortgage Interest Deduction:

If you have a mortgage, you might get a tax break on the interest you pay. TCJA put limits on how much you can claim, and those limits might change after 2025.

Limitation on Tax Deductions (SALT):

If you pay lots of state and local taxes, TCJA put a cap on how much you can deduct. That might change soon.

Suspension of Tier 2 Miscellaneous Itemized Deductions:

These are deductions like legal fees and job-related expenses. TCJA said you can't deduct them, but that might change.

Suspension of the Limitation on Itemized Deductions:

Before TCJA, some people couldn't claim all their deductions. TCJA eased those limits, but they could come back.

Individual Tax Rates:

TCJA lowered tax rates for lots of people. But those rates might go back up after 2025.

Child Tax Credit:

Families with kids got a bigger tax credit under TCJA, but that might change soon.

Special Rule for Certain Discharges of Student Loans:

If you had student loans forgiven, you didn't have to pay taxes on the forgiven amount. But that rule could change.

Employer Payments of Student Loans:

Some employers help pay off their workers' student loans. That could change after 2025.

Moving Expenses:

If you moved for work, you might have gotten a tax break. But that's on hold until 2025.

Bicycle Commuting:

If you biked to work, you might have gotten a tax break. But that's on hold until 2025.

Discharge of Indebtedness on Principal Residence:

If you lost your home to foreclosure, you might not have to pay taxes on the forgiven debt. But that rule could change.

Premium Assistance Credit:

If you buy health insurance through the government, you might get a tax credit. But that could change after 2025.

Casualty Losses:

If you had losses because of a disaster, you could claim them on your taxes. But that rule could change.

Achieving a Better Life Experience (ABLE) Accounts:

These accounts help people with disabilities save money. But some of the rules might change.

Paid Family and Medical Leave Credit:

Some employers get a tax credit for paying their workers while they're on leave. But that credit could change.

New Markets Credit:

This tax credit helps businesses invest in low-income areas. But it might change after 2025.

Work Opportunity Credit:

Employers can get a tax credit for hiring certain workers. But that credit could change after 2025.

Bonus Depreciation:

Businesses can claim a big deduction for buying new stuff. But that could change soon.

Employer De Minimis Meals and Related Eating Facilities:

Some companies get a tax break for feeding their workers. But that could change soon.

These tax changes could affect lots of people. If you have questions, ask your tax pro!

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