- Legislation still possible during “lame-duck” session
- Based on campaign, Tax Cuts and Jobs Act of 2017 (TCJA) extenders likely to be priority for 2025
- Funding for proposals set to be a large consideration next year
The Bottom Line
Now that the presidential election has been called for President-elect Donald Trump, taxpayers are now looking toward what lies ahead for their businesses and families from a tax perspective.
Between now and year-end is a period dubbed the “lame-duck” session in Congress. During this period, Congress is expected to consider many legislative matters including the National Defense Authorization Act, extension of the Farm Bill, funding the government more broadly, the end of debt limit suspension, and tax proposals. For example, it is possible that Congress considers legislation already proposed—including the Tax Relief for American Families and Workers Act of 2024 (the Bill) which incorporates 100% bonus depreciation, Section 174 immediate expensing, and §163(j) changes—or introduces new proposals prior to the 119th Congress. Based on a Treasury Department announcement, however, it may be likely that the focus of legislation from now to year-end is the Taiwan tax relief and the natural disaster portions of the Bill.
2025 ushers in a year set to be filled with much debate about tax policy. Given President-elect Trump’s messaging on the campaign trail, much of this debate will focus on extending provisions sunsetting within the TCJA. Without action from Congress, at the start of 2026 some of the more influential changes would be:
- 199A Qualified Business Income Deduction—no deduction
- Estate and Gift Tax Exemption—set to be cut in half from current levels
- State and Local Tax (SALT) “Cap”— $10,000 “cap” no longer applies
- Variety of individual taxpayer changes—standard deduction and Child Tax Credit drops, top individual tax rate increases
A big factor on the minds of legislators is funding for proposals in the coming year given the economic environment of the country. While President-elect Trump discussed possible funding mechanisms during his campaign, the question of balancing legislative priorities with the state of the deficit will be a point of discussion in the coming year.
All of this to say, bill proposals and progression to enactment will likely be impacted by the results of the Congressional election. Republicans will be the majority in the Senate, while the House majority is still undecided. Forvis Mazars is set to provide more insights once the House races are finalized, including what a potential “Republican sweep” or “divided government” may hold.