The Tax Cuts and Jobs Act of 2017 is the main federal tax law in effect right now
The Tax Cuts and Jobs Act, passed in December 2017, set the tax rates, deductions, and rules that apply to your 2024 tax return. This law changed income tax brackets, the standard deduction, child tax credits, and how businesses are taxed. Most of these changes were set to expire at the end of 2025, which means Congress will need to vote on whether to extend them, modify them, or let them revert to earlier rules.
The law applies to everyone filing a federal tax return, whether you are self-employed, work for a company, or receive investment income. The rates and deductions you see on your 2024 return come directly from this 2017 law, adjusted each year for inflation.
Key Takeaways
- The Tax Cuts and Jobs Act of 2017 sets the tax brackets and deductions you use on your current return, with most provisions expiring after 2025.
- The standard deduction for 2024 is $14,600 for single filers and $29,200 for married couples filing jointly, adjusted annually for inflation.
- Tax brackets range from 10 percent to 37 percent depending on your income, and these rates apply to ordinary income like wages and salary.
- Some provisions, like the $2,000 child tax credit and limits on state and local tax deductions, came from this law and may change after 2025.
What changed when the 2017 law took effect
The Tax Cuts and Jobs Act lowered income tax rates across all brackets. For example, the top rate dropped from 39.6 percent to 37 percent. The law also roughly doubled the standard deduction — the amount you can deduct without itemizing — which meant fewer people needed to list out deductions like mortgage interest or charitable donations.
The law created a new 20 percent deduction for pass-through business income, meaning owners of sole proprietorships, partnerships, and S-corporations could deduct up to 20 percent of their business income. It also raised the child tax credit from $1,000 to $2,000 per child and increased the income thresholds before the credit phases out.
At the same time, the law capped deductions for state and local taxes (called SALT) at $10,000 per year. This affected people in high-tax states who previously could deduct unlimited amounts of state income tax and property tax.
The 2025 expiration and what happens next
Most of the individual income tax provisions in the 2017 law are scheduled to expire on December 31, 2025. This means that starting January 1, 2026, tax brackets would revert to their pre-2017 levels, the standard deduction would drop, and the child tax credit would return to $1,000 per child unless Congress votes to extend or change these rules.
Congress has not yet voted on whether to extend these provisions. The outcome depends on which party controls Congress and the presidency after the 2024 elections. Some lawmakers have proposed extending the current rates indefinitely, others have proposed letting them expire as scheduled, and still others have proposed modifying them.
You will not see changes on your 2024 or 2025 tax return. The expiration affects returns filed in 2026 and later, unless Congress acts before the end of 2025.
Current tax brackets for 2024
The 2024 tax brackets under the current law are:
| Tax Rate | Single Filers | Married Filing Jointly |
|---|---|---|
| 10% | Up to $11,600 | Up to $23,200 |
| 12% | $11,601 to $47,150 | $23,201 to $94,300 |
| 22% | $47,151 to $100,525 | $94,301 to $201,050 |
| 24% | $100,526 to $191,950 | $201,051 to $383,900 |
| 32% | $191,951 to $243,725 | $383,901 to $487,450 |
| 35% | $243,726 to $609,350 | $487,451 to $731,200 |
| 37% | Over $609,350 | Over $731,200 |
These brackets are adjusted each year for inflation, so the income ranges change annually. The rates themselves have remained the same since 2018.
How the standard deduction works under current law
The standard deduction is a fixed amount you can subtract from your income before calculating tax. For 2024, the standard deduction is $14,600 for single filers, $29,200 for married couples filing jointly, and $21,900 for heads of household. If you are 65 or older, you get an additional $1,850 (single) or $1,500 per spouse (married).
Most people use the standard deduction because it is simpler than itemizing deductions and because the amount is usually larger than the total of their individual deductions. You can only use one or the other — you cannot take both the standard deduction and itemize.
The standard deduction amounts increase each year based on inflation, so they will be slightly higher in 2025 and beyond.
Credits and deductions that came from the 2017 law
The child tax credit is $2,000 per child under 17 as of 2024. The credit begins to phase out when your income exceeds $400,000 (married filing jointly) or $200,000 (single). This credit is much larger than it was before 2017, when it was $1,000 per child.
The SALT cap limits your deduction for state and local income taxes, property taxes, and sales taxes combined to $10,000 per year. Before 2017, there was no cap. This affects people in high-tax states who itemize deductions.
The pass-through deduction allows self-employed people and business owners to deduct up to 20 percent of their may have access to business income. This deduction has income limits and does not apply to certain types of businesses like law firms and medical practices.
What you need to know about future changes
Tax law can change at any time Congress votes to change it. The 2025 expiration is not automatic — it is a date that Congress set when it passed the 2017 law. Congress could extend the current rates, modify them, or let them expire.
If you are planning for future years, it is reasonable to assume that tax rates could be different in 2026 than they are now. This matters if you are deciding whether to take income in 2024 versus 2025, or if you are making charitable donations or other tax-related decisions.
The IRS website (irs.gov) publishes updated tax brackets and standard deduction amounts each year, usually in October or November for the following year. Your tax software or tax preparer will use the correct rates for the year you are filing.
Frequently Asked Questions
Will my taxes go up in 2026?
It depends on what Congress does before the end of 2025. If the current law expires as scheduled and Congress does not extend it, tax rates would increase for most people, the standard deduction would drop, and the child tax credit would shrink. Congress has not yet voted on whether to extend these provisions.
Are the tax brackets the same every year?
The rates stay the same, but the income ranges adjust for inflation each year. For example, the 12 percent bracket might cover $11,601 to $47,150 in 2024 and a slightly higher range in 2025. The IRS announces the new brackets each fall.
What happens if I do not use the standard deduction?
You can itemize deductions instead, which means listing out specific expenses like mortgage interest, charitable donations, and state and local taxes. Itemizing makes sense only if your total deductions exceed the standard deduction for your filing status. Most people save money by using the standard deduction.
Does the child tax credit apply to all children?
The $2,000 credit applies to children under 17 who are U.S. citizens, nationals, or resident aliens. You must claim them as dependents on your return. The credit phases out if your income is above $400,000 (married filing jointly) or $200,000 (single).
Where can I find the official tax rates for my state?
Federal tax rates are the same everywhere, but states have their own income tax rates and rules. Your state's tax department website lists state rates and deductions. The IRS website (irs.gov) has federal rates and the standard deduction amounts.