{"id":11445,"date":"2025-03-09T20:24:14","date_gmt":"2025-03-09T20:24:14","guid":{"rendered":"https:\/\/finderica.com\/?p=11445"},"modified":"2025-03-09T20:24:14","modified_gmt":"2025-03-09T20:24:14","slug":"see-which-tax-provisions-are-expiring-in-2025-and-how-it-affects-you","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=11445","title":{"rendered":"See Which Tax Provisions Are Expiring in 2025 \u2014 And How it Affects You"},"content":{"rendered":"\n
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\"ScoreCard<\/p>\n

The Tax Cuts and Jobs Act (TCJA) overhauled the American tax code in late 2017, and those changes affected taxpayers in different ways. Whether it was a positive or negative change, several components of the TCJA will expire at the end of next year.<\/p>\n

We\u2019re going to review the TCJA tax provisions that are expiring on December 31, 2025. Renewing them would require Congress passing a bill and the President signing it. If you see one you don\u2019t want to lose, you could call your congressional representatives to let them know.\n<\/p>\n

Child Tax Credits<\/strong><\/h2>\n

The TCJA and temporary programming that ran during the initial years of the pandemic increased child tax credits by multiples of 100%. Without further legislation, they may go back to their 2017 levels.<\/p>\n

Child Tax Credit<\/strong><\/h3>\n

The Tax Cuts and Jobs Act doubled the value of the Child Tax Credit. It also increased the refundable portion (the Additional Child Tax Credit) by 40%. For the moment, these increases will expire at the end of 2025.<\/p>\n

A bill that improves upon the refundable portion of the credit recently passed the House and is awaiting a vote in the Senate. If the Tax Relief for American Families and Workers Act of 2024<\/a> passes into law, it would make the full Child Tax Credit refundable by 2025, with incremental increases for the tax years 2023 and 2024.<\/p>\n

But it doesn\u2019t do anything to extend these increases beyond the 2025 tax year. That would still require a further act of Congress.<\/p>\n

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7 Ways to Make Money if You Hate People<\/h3>\n

Do you avoid people too? In the past, there was almost no way around working with people if you wanted to earn a living, but things have changed.<\/p>\n

Our team has compiled a list of creative ways<\/a> you can fatten your bank account this month, without having to put up with people.<\/p>\n

Enough small talk. Here are some ways<\/a> to earn extra cash, without all of the social stuff.<\/p>\n<\/div>\n<\/div>\n

Credit for Other Dependents<\/strong><\/h3>\n

If you have a dependent over the age of 17 or a child who doesn\u2019t have a Social Security number, you can claim a $500 credit for them using the Child Tax Credit worksheet. You have to fully provide financially for the person in order for this credit to apply. Situations where this might apply is if you have a college student under the age of 24 or if you are the parent of a disabled adult for whom you provide everything.<\/p>\n

Currently, this credit is set to expire at the end of 2025.<\/p>\n

ABLE Account Changes<\/strong><\/h2>\n

Several changes to ABLE accounts were included in the The Tax Cuts and Jobs Act. The continuation of these would allow disabled people to build their savings without the risk of losing disability benefits or health care access.<\/p>\n

ABLE to Work<\/strong><\/h3>\n

Annual contributions to ABLE accounts are capped at the annual gift tax exemption amount, which is $18,000 in 2024. However, ABLE to Work made it so disabled individuals who are working and contributing to their ABLE account have a max contribution level of the annual gift tax exemption plus<\/b> 100% of the federal poverty level for a one-person household.<\/p>\n

In 2024, that means ABLE to Work allows disabled people to save an additional $15,060 per year if they live in the contiguous states, for a grand total of $33,060. (Assuming they earn at least $15,060 in 2024.)<\/p>\n

Disabled individuals can\u2019t save in a traditional deposit account past $2,000 without losing disability benefits.<\/p>\n

Without an extension, working disabled adults will only be able to save the annual gift tax exemption amount per year without the extra allowance.<\/p>\n

ABLE application to the Saver\u2019s Credit<\/strong><\/h3>\n

If you are disabled and contribute to your own ABLE account throughout the year, your contributions make you eligible for the Saver\u2019s Credit. The non-refundable Saver\u2019s Credit allows you to reduce your tax burden by up to 10%, 20% or 50% of your contribution amount depending on your income. This provision is set to expire on December 31, 2025.<\/p>\n

529 to ABLE Account rollovers<\/strong><\/h3>\n

For right now, you can roll a 529 over to an ABLE account, and the rollover will not be taxable as long as the amount doesn\u2019t exceed that year\u2019s contribution limits.<\/p>\n

There are several advantages to rolling over a 529 account to an ABLE account. First, if your child doesn\u2019t go to college, funds in an ABLE account qualify for any number of lifestyle withdrawals \u2013 the limitations aren\u2019t nearly as strict as those of a 529 account. If your child does go to college, ABLE account funds don\u2019t hurt you on the FAFSA, while 529 balances potentially have a small impact on the financial aid offered.<\/p>\n

Unless something changes between now and then, these tax-free rollovers will no longer be allowed after 2025.<\/p>\n

Standard and Itemized Deduction Changes<\/strong><\/h2>\n

One of the most universal line items that changed with the TCJA was the standard deduction. The change was dramatic and had an impact on other line items further down your return.<\/p>\n

Standard Deductions<\/strong><\/h3>\n

Standard deductions nearly doubled under the TCJA. Itemizing deductions then made a lot less sense for the vast majority of Americans. If nothing happens between now and December 31, 2025, the base deductions will get slashed by almost 50%. (The deduction accounts for the base + inflation.) If this comes to pass, you may want to start holding onto your receipts again in 2026, as itemized deductions may be bigger than the standard deduction again, depending on your financial situation.<\/p>\n

Whatever does or doesn\u2019t happen with the standard deduction between now and the end of 2025, we might see it impact a myriad of other deductions, credits and exemptions, too. Let\u2019s explore the ones most likely to hinge on the standard deduction.<\/p>\n

Personal Exemptions<\/strong><\/h3>\n

In part because the standard deduction became so large under the Tax Cuts and Jobs Act, personal exemptions disappeared. You used to be able to claim $4,150 + inflation for yourself and each dependent you were claiming on your return. This reduced your taxable income, and ended up serving essentially the same function as a deduction.<\/p>\n

Personal exemptions haven\u2019t been a thing since the TCJA passed, but unless there\u2019s legislative intervention between now and then, they\u2019ll make an appearance in the 2026 tax year.<\/p>\n

Moving Expense Deduction<\/strong><\/h3>\n

Everyone used to be able to claim moving expenses they paid out of their own pocket as a deduction \u2013 assuming your move pertained to your employment. It made sense to claim this deduction back when standard deductions were lower.<\/p>\n

Under the TCJA, you can\u2019t claim this deduction \u2013 even if claiming it would put your itemized deductions above that of the high TCJA standard deductions. The only exception is if you\u2019re in the Armed Forces.<\/p>\n

If left untouched, everyone would be able to claim this deduction again starting in 2026.<\/p>\n

Moving Reimbursement Exclusion<\/strong><\/h3>\n

Prior to the TCJA, if your employer paid for you to move, you weren\u2019t taxed on that sum as income. Under the TCJA, unless you\u2019re in the military, you have to pay taxes on the expenses your employer covered as compensation.<\/p>\n

Without further intervention, this practice will stop after December 2025.<\/p>\n

Charitable Contributions Deduction<\/strong><\/h3>\n

Prior to the TCJA, you could only deduct charitable donations of up to 50% of your adjusted gross income (AGI). The TCJA bumped that up to 60% of your AGI. It also made the standard deduction dramatically higher, so unless you\u2019re making (and donating) a ton of money, you probably don\u2019t claim this deduction anymore.<\/p>\n

If nothing changes between now and the end of 2025, the charitable contributions deduction will once again be capped at 50% of your AGI.<\/p>\n

State and Local Tax (SALT) Deduction<\/strong><\/h3>\n

The SALT deduction used to be uncapped and included taxes paid on foreign real estate. The TCJA changed that for individuals, putting a cap of $10,000 on this deduction and excluding taxes paid on foreign real estate. The $10,000 cap doesn\u2019t apply if you\u2019re paying taxes necessary to run a business.<\/p>\n

If this provision expired, the cap would disappear entirely and foreign real estate taxes would once again be fair game.<\/p>\n

Mortgage Interest Deduction<\/strong><\/h3>\n

Before the Tax Cuts and Jobs Act, you could deduct the mortgage interest you paid throughout the year on the first $1 million of mortgage debt. If you bought your home before December 15, 2017, that rule still applies (though you can only deduct the interest on the first $500,000 if you\u2019re married filing separately.)<\/p>\n

However, if you took out a mortgage after December 15, 2017, for now you can only claim the interest on the first $750,000 of mortgage debt (or $375,000 if you\u2019re married filing separately.) The increase of the standard deduction also meant the number of claims on this deduction went down.<\/p>\n

Should nothing change between now and the end of 2025, everyone will be able to claim the deduction on interest paid on the first $1 million of mortgage debt.<\/p>\n

Personal Casualty and Theft Loss Deduction<\/strong><\/h3>\n

Under the TCJA, you can only claim a deduction for personal casualty and theft loss if the loss occurred in an event that the President declares a Section 401 disaster. If the provision is allowed to expire, that requirement will disappear.<\/p>\n

Gambling Deductions<\/strong><\/h3>\n

The TCJA expanded the gambling losses you could claim as deductions on your taxes. To claim a deduction like this, you must have more gambling winnings than losses on your tax return.<\/p>\n

After 2025, recreational gamblers will no longer be able to deduct \u2018expenses incurred in carrying on the gambling activity.\u2019 Professional gamblers will only be allowed to deduct nonwager expenses.<\/p>\n

Itemized Deduction for Miscellaneous Expenses<\/strong><\/h3>\n

The TCJA allowed the ability to deduct unreimbursed employee expenses for people in following professions (or those who incurred unreimbursed employment expenses because of a disability,).<\/p>\n