The current federal tax code comes from the Tax Cuts and Jobs Act of 2017

The tax plan most people refer to as "Trump's tax plan" is formally the Tax Cuts and Jobs Act, passed in December 2017. It is the tax code that is in effect right now for the 2024 tax year and beyond. This law lowered income tax rates, changed how deductions work, and altered rules for businesses and investment income.

The law was not repealed or replaced. Congress has made small changes to specific parts of it since 2017, but the overall structure remains. When you file your 2024 taxes, you are filing under this code.

The key thing to understand is that many provisions in this law are set to expire on December 31, 2025, unless Congress votes to extend them. This means the tax code you use in 2026 may be different from the one you use now, depending on what Congress does in 2025.

Key Takeaways

  • The Tax Cuts and Jobs Act of 2017 is the current federal tax code for 2024 and 2025.
  • Major provisions of this law expire at the end of 2025, which means tax rates and deductions may change in 2026 unless Congress extends them.
  • The law lowered individual income tax rates, nearly doubled the standard deduction, and eliminated or capped many itemized deductions.
  • State and local tax deductions are capped at $10,000 per year under the current code.
  • Changes to the tax code require a vote in Congress, not an executive order.

What changed when the 2017 law took effect

The Tax Cuts and Jobs Act made several changes that affected most taxpayers. Individual income tax rates dropped across all brackets. The standard deduction — the amount you can deduct without itemizing — nearly doubled: to $13,850 for single filers and $27,700 for married couples filing jointly in 2024.

The law also eliminated the personal exemption, which had allowed you to deduct a fixed amount for yourself and each dependent. That deduction went away, but the higher standard deduction was meant to offset it for most people.

For people who itemize deductions instead of taking the standard deduction, the law capped the state and local tax deduction (SALT) at $10,000 per year. This affected people in high-tax states more than others. The law also limited the mortgage interest deduction to loans of $750,000 or less, down from $1 million.

Which provisions expire at the end of 2025

The individual income tax rate cuts are set to expire on December 31, 2025. This means that unless Congress votes to extend them, tax rates will revert to what they were before 2017 starting in 2026. The higher standard deduction will also expire and return to a lower amount.

The changes to business taxes, by contrast, are permanent. The corporate tax rate was lowered from 35 percent to 21 percent, and that change does not expire.

Congress can vote to extend the expiring provisions before the end of 2025. It can also vote to let them expire, or to extend some and let others expire. What happens depends on the votes in the House and Senate at that time.

How to find out what your current tax rate is

Your tax rate depends on your income level and filing status. The IRS publishes tax brackets every year. For 2024, a single person with $50,000 in taxable income falls into the 22 percent bracket, while a married couple with $100,000 in taxable income falls into the 12 percent bracket.

The brackets are adjusted each year for inflation, so the income ranges change. You can find the current brackets on the IRS website or in the instructions that come with your tax form. Your tax software will also calculate your rate based on your income.

Keep in mind that your tax bracket does not mean you pay that rate on all your income. The U.S. uses a progressive system: you pay 10 percent on the first portion of your income, then 12 percent on the next portion, and so on. Only the income in the highest bracket you reach is taxed at that rate.

What happens if Congress does not extend the expiring provisions

If the individual income tax cuts expire at the end of 2025 and Congress does not extend them, tax rates will increase for most people starting January 1, 2026. The standard deduction will also decrease. This would mean higher taxes on your 2026 income when you file in 2027.

Congress typically debates whether to extend or modify tax provisions before they expire. There is usually some advance notice and discussion. However, the outcome is not certain until Congress votes.

If you are planning your finances for 2026 and beyond, it may be worth checking the status of these provisions as 2025 progresses. Tax planning websites and news outlets typically cover major developments in tax law.

How state taxes relate to federal taxes

Federal tax law and state tax law are separate. The Tax Cuts and Jobs Act changed federal taxes, but it did not change how state taxes work. Each state sets its own tax rates and rules.

The $10,000 cap on the state and local tax deduction is a federal rule. It limits how much you can deduct from your federal taxes if you pay state income tax, property tax, or sales tax. But it does not change what you owe to your state.

Some states have their own tax brackets and rates that are completely independent of federal law. If you live in a state with income tax, you will file both a federal return and a state return, and they operate under different rules.

Frequently Asked Questions

Will my taxes go up in 2026?

It depends on whether Congress extends the current tax rates before the end of 2025. If they do not, tax rates will increase and the standard deduction will decrease for most people. Congress has not yet voted on whether to extend these provisions, so the outcome is not certain.

What is the difference between the standard deduction and itemized deductions?

The standard deduction is a fixed amount you can deduct from your income without listing individual expenses. Itemized deductions let you deduct specific expenses like mortgage interest, charitable donations, or state and local taxes, but only if the total exceeds the standard deduction. Most people use the standard deduction because it is simpler and larger.

Did the 2017 tax law help or hurt most people?

The effect varied by income level and location. Most people saw lower tax bills in 2018 through 2025 because of the rate cuts and higher standard deduction. People in high-tax states with high property values were more likely to be hurt by the $10,000 SALT cap. The long-term effect depends on whether Congress extends the provisions past 2025.

Can the president change the tax code without Congress?

No. Tax law is set by Congress, not by the president. The president can propose changes and sign bills that Congress passes, but cannot change tax rates or deductions by executive order. Any changes to the current tax code require a vote in the House and Senate.

Where can I find the exact tax rates for my income level?

The IRS publishes tax brackets and rates on its website (irs.gov) every year. You can also find them in the instructions that come with your tax form, or in tax software you use to file. The brackets change slightly each year for inflation.