The Tax Cuts and Jobs Act of 2017 – Preparing for the Sunset

Executive summary:

  • The Tax Cuts and Jobs Act of 2017 is expected to "sunset" in 2025 which could usher in several tax changes
  • Among the provisions that could expire are the cuts in income tax rates and the child tax credit; there may also be changes to capital gains taxes
  • We believe the best way to mitigate the impact of these changes is to plan for them
  • Tax-smart investing strategies can help lower the potential impact of rising taxes

Anticipation is one of those mental states that can result in either relief, or disappointment. We may anticipate the results of a test, for example, and feel relieved if the results are good, or disappointed if they are not.

This definition of "anticipation" is a great way to think about the potential expiration of the Tax Cuts and Jobs Act of 2017 (TCJA). Are we going to experience relief, or disappointment? That is not going to be answered until a new law is signed (or not) to replace the TCJA.

In the meantime, we are likely to experience some anxiety as the process unfolds, as negotiations occur, as different proposals and tax law changes are put forward. Fear may kick in too, on worries about tax rates and other changes and how they may impact us as taxpayers and investors individually and collectively.

What's the best way to deal with these mixed emotions? Well, understanding the key sections of the tax law that may change will at least let you plan for them. And that could alleviate the fear and anxiety you may be feeling. Let's take a deep dive into seven key areas of the tax law that changed in 2017 and could change again in 2025 as the TCJA sunsets (or not) and see how we can prepare for what may happen.