A Look Back: The Impact of the 2017 Tax Cuts and Jobs Act (TCJA)

During his first term, President Donald Trump enacted the Tax Cuts and Jobs Act (TCJA), which significantly altered the U.S. tax code. Designed to stimulate the economy, the TCJA doubled the standard deduction, reduced individual and corporate tax rates, and increased the child tax credit. But many of these provisions are set to expire at the end of 2025.

According to the IRS and the Tax Policy Center, if no action is taken by Congress, most taxpayers — especially those with businesses, investments, and estates — will see their tax liabilities rise beginning in 2026 [source].

How the TCJA Changed the Game for Individual and Business Taxpayers

🔹 Standard Deduction vs. Itemization

Tax experts, notes the TCJA led many taxpayers to opt for the standard deduction due to its increase from $6,500 to $12,000 in 2017 — now $15,000 for 2025. This change simplified filing for many but reduced the number of people benefiting from itemized deductions [source].

🔹 SALT Cap & Estate Exemption

The TCJA also capped state and local tax (SALT) deductions at $10,000 — a blow to high-income earners in high-tax states. Estate tax exemptions were raised to over $14 million, but these too would be halved if TCJA provisions expire [source].

What Happens If TCJA Expires in 2025?

• Marginal tax rates could revert to pre-2017 levels — with the top bracket going back to 39.6%.

• The federal estate tax exemption would fall to $7 million.

• The child tax credit would be cut in half.

• SALT deduction limits could remain or potentially be repealed, pending legislative action.

The Tax Foundation estimates more than 62% of Americans may face higher taxes in 2026 if TCJA provisions sunset.

How Much Could You Save if TCJA Is Extended?

There’s no one-size-fits-all answer.

• Individual A with high mortgage interest and charitable donations could benefit from itemizing.

• Individual B without those expenses might face higher taxes due to a lower standard deduction.

Lakeline Tax experts in Cedar Park, Austin, and across Texas recommend high-income individuals and business owners conduct personalized tax scenario planning now — especially if they anticipate major events like selling a business, retiring, or transferring wealth.

Real Stories, Real Results

One of our Cedar Park clients, a high-net-worth investor and business owner, came to Lakeline Tax after receiving conflicting advice from a national chain. Through personalized tax planning, we helped him:

• Optimize real estate deductions

• Set up a family limited partnership

• Minimize estate taxes

• Save over $72,000 in taxes in just one year

Another Austin-based doctor was about to file using TurboTax but was unsure about reporting crypto gains and foreign investments. Our team not only corrected errors but also helped him restructure his holdings — leading to significant tax deferral opportunities.

Penny-Wise, Pound-Foolish: The Dangers of DIY Tax Software

While software like TurboTax and H&R Block works for simple returns, high-net-worth individuals and business owners face complex scenarios — think pass-through entities, multi-state income, real estate depreciation, and foreign assets.

A few reasons to reconsider:

• DIY tools often miss nuanced deductions and credits.

• IRS audits often target Schedule C and high-income S-corp filers.

• Mistakes can trigger back taxes, penalties, and interest.

At Lakeline Tax, we believe in precision, personalization, and protection.

Action Steps: What Should You Do Now?

1. Schedule a Tax Review

Book a no-obligation consultation with our experienced Lakeline tax planning team.

2. Analyze Scenarios

Review how expiration vs. extension of the TCJA may affect your income, deductions, estate, and business plans.

3. Plan for 2025 and Beyond

Strategically time your income, investments, and gifting to align with the most advantageous tax year.

Ready to Optimize Your Tax Future?

Lakeline Tax Services | Cedar Park | Austin | Leander | Round Rock
🌐 www.lakelinetax.com
📞 Call us: (512) 335-8037