Accounting
TCJA extensions or revisions: What lies ahead for 2025
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Many accountants were doubtful of Donald Trump’s chances for a successful reelection on Nov. 5, despite the fact that many also thought he would be a better candidate for the profession. With his return to the White House now confirmed, the waiting game begins to see which promises of wide-sweeping change to the tax landscape come to life.
The Republican majorities in the Senate and House of Representatives will grant President-elect Trump an easier time in refreshing many of the expiring provisions in his 2017
“These changes reshaped tax planning for both individuals and businesses, creating new opportunities for savings,” said Arron Bennett, CEO of the Oak Ridge, Tennessee-based tax planning firm Bennett Financials.
It’s increasingly likely that Trump will seek to make certain provisions of the TCJA like the QBID permanent, as was put forward in the
Mark Luscombe, principal analyst in Wolters Kluwer Tax and Accounting, said cementing the sunsetting provisions of the TCJA “would be very expensive” and that a more beneficial compromise for addressing deficit concerns would be “to just extend them for a few more years.”
“An extension would benefit almost all taxpayers; however, the bulk of the tax benefit would go to higher-income taxpayers,” Luscombe said.
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Regulatory uncertainty is just one question looming across the profession, however. With control of both houses of Congress,
Much of the funding granted to the IRS under the Inflation Reduction Act of 2022 has gone towards strengthening the agency’s enforcement capabilities, which in turn generate revenue. Other funds have been used to bolster taxpayer services and to support regular operations.Andrea Harrington, a CPA and partner at the Glastonbury, Connecticut-based accounting firm Fiondella Milone & Lasaracina, said she hopes funding for the IRS is maintained, specifically directing resources towards “processing amended returns related to COVID relief provisions.””The uncertainty over what exactly will happen makes planning a bit more challenging. … We’ll be watching legislative proposals even more closely so we can pivot in our recommendations as needed,” Harrington said.
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Below is a compilation of expert insight and predictions into what the tax landscape could look like in 2025 and what professionals need to start considering during planning discussions.
IRS funding in limbo following Trump win
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In the wake of Trump’s successful bid for reelection, many accountants predict the new administration will seek to cut the IRS’s funding more so than in recent years.
Republican legislators have already seen success in efforts to
“I think IRS funding is at significant risk right now, both the annual appropriation funding as well as the remaining IRA funding,” Rochelle Hodes, Washington National Tax Office principal at the Top 25 Firm Crowe, said in an interview with AT’s
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A look at Trump promises for the 2025 tax landscape
Parker Michels-Boyce/Bloomberg
Trump’s campaign promises on taxes were numerous and sweeping, ranging from lowering the corporate tax rate and tax credits for caregivers and those purchasing domestically made automobiles, to the return of 100% bonus depreciation.
As the countdown to his second term continues, along with the approaching deadline for many parts of the Tax Cuts and Jobs Act of 2017, much is up in the air.
“No one has a crystal ball on what’s going to happen here, but certainly it’s a little bit clearer based on a Trump victory than it would have been based on a Harris victory,” Brian Newman, a tax partner at Top 25 Firm CohnReznick in Hartford, Connecticut, said in an interview with AT’s
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What are preparers worried about in the coming administration?
Al Drago/Photographer: Al Drago/Bloomberg
Accounting professionals and preparers say that a new but not wholly unfamiliar Trump administration, will bring new approaches to taxes and the surrounding regulatory environment with it.
Kelly Myers, an advisor with Myers Consulting Group, and formerly a career IRS officer with 30-plus years of experience, told AT’s
“People will be watching as they move forward on the Tax Cuts and Jobs Act; the biggest thing is the SALT limitation with its $10,000 cap,” Myers said.
The provisions of the TCJA are top of mind for Trump, as issues like the qualified business income deduction and a renewed R&D credit operating on a dollar-for-dollar basis are up for change.
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What is Trump focused on when it comes to taxes?
Eva Marie Uzcategui/Bloomberg
President-elect Trump had an eventful first term when it came to tax policies, implementing the likes of the
The estimated price tag for extending all the provisions of the TCJA amounts to roughly $4.6 trillion, according to Rochelle Hodes, Washington National Tax Office principal at the Top 25 Firm Crowe.
“If they are allowed to expire, that would raise the tax for many individuals, which is an unattractive proposition for any president or for Congress,” Hodes said in an interview with AT. “The decision will have to be made about which will be allowed to expire, whether or not some of the provisions will be changed in order to accommodate whatever budget goals are agreed upon, then the decision and consensus will have to be made concerning offsets to pay for the resolution of expiring provisions.”
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Approaching the impending tax quagmire in 2025
Yuri Gripas/Photographer: Yuri Gripas/Bloomb
Industry professionals achieved a small measure of TCJA relief following Trump’s successful bid for reelection, as many expiring provisions are now much more likely to be renewed.
But where other legislative efforts are concerned, a
Jonathan Traub,
“You will need almost perfect unity — more so in the House than the Senate,” Traub said. “This really gives a lot of power, I think, to any small group of House members who decide that they will lie down on the train tracks to block a bill they don’t like or to enforce the inclusion of a provision that they really want.”
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The House unanimously passed four bipartisan bills Tuesday concerning taxes and the Internal Revenue Service that were all
- H.R. 1152, the Electronic Filing and Payment Fairness Act, sponsored by Rep. Darin LaHood, R-Illinois, Suzan Delbene, D-Washington, Randy Feenstra, R-Iowa, Brad Schneider, D-Illinois, Brian Fitzpatrick, R-Pennsylvania and Jimmy Panetta, D-California. The bill would apply the “mailbox rule” to electronically submitted tax returns and payments to allow the IRS to record payments and documents submitted to the IRS electronically on the day the payments or documents are submitted instead of when they are received or reviewed at a later date. The AICPA believes this would offer clarity and simplification to the payment and document submission process while protecting taxpayers from undue penalties.
- H.R. 998, the Internal Revenue Service Math and Taxpayer Help Act, sponsored by Rep. Randy Feenstra, R-Iowa, and Brad Schneider, D-Illinois, which would require notices describing a mathematical or clerical error to be made in plain language, and require the Treasury to provide additional procedures for requesting an abatement of a math or clerical error adjustment, including by telephone or in person, among other provisions.
- H.R. 517, the Filing Relief for Natural Disasters Act, sponsored by Rep. David Kustoff, R-Tennessee, and Judy Chu, D-California. The process of receiving tax relief from the IRS following a natural disaster typically must follow a federal disaster declaration, which can often come weeks after a state disaster declaration. The bill would provide the IRS with authority to grant tax relief once the governor of a state declares either a disaster or a state of emergency and expand the mandatory federal filing extension under Section 7508(d) of the Tax Code from 60 days to 120 days, providing taxpayers with more time to file tax returns after a disaster.
- H.R. 1491, the Disaster related Extension of Deadlines Act, sponsored by Rep. Gregory Murphy, R-North Carolina, and Jimmy Panetta, D-California, would extend the amount of time disaster victims would have to file for a tax refund or credit (i.e., the lookback period) by the amount of time afforded pursuant to a disaster relief postponement period for taxpayers affected by major disasters. This legislative solution would place taxpayers on equal footing as taxpayers not impacted by major disasters and would afford greater clarity and certainty to taxpayers and tax practitioners regarding this lookback period.
“The AICPA has long supported these proposals and will continue to work to advance comprehensive legislation that enhances IRS operations and improves the taxpayer experience,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Tuesday. “We are pleased to work closely with each of these Representatives on common-sense reforms that will benefit taxpayers, tax practitioners and tax administration and we’re encouraged by their passage in the House. We look forward to continuing to work with Congress to improve the taxpayer experience.”
The bills were also included in a recent Senate
The House also passed two other tax-related bills Tuesday that weren’t endorsed in the recent AICPA letter.
- H.R. 1155, Recovery of Stolen Checks Act, sponsored by Rep. Nicole Malliotakis, R-New York, would require the IRS to create a process for taxpayers to request a replacement via direct deposit for a stolen paper check. If a check is determined to be stolen or lost, and not cashed, a taxpayer will receive a replacement check once the original check is cancelled, but many taxpayers are having their replacement checks stolen as well. Taxpayers who have a check stolen are then unable to request that the replacement check be sent via direct deposit. The bill would require the Treasury to establish processes and procedures under which taxpayers, who are otherwise eligible to receive an amount by paper check in replacement of a lost or stolen paper check, may elect to receive such amount by direct deposit.
- H.R. 997, National Taxpayer Advocate Enhancement Act, sponsored by Rep. Randy Feenstra, R-Iowa, would prevent IRS interference with National Taxpayer Advocate personnel by granting the NTA responsibility for its attorneys. In advocating for taxpayer rights, the National Taxpayer Advocate often requires independent legal advice. But currently, the staff members hired by the National Taxpayer Advocate are accountable to internal IRS counsel, not the Taxpayer Advocate, creating a potential conflict of interest to the detriment of taxpayers. The bill would authorize the National Taxpayer Advocate to hire attorneys who report directly to her, helping establish independence from the IRS.
House Ways and Means Committee Chairman Jason Smith, R-Missouri, applauded the bipartisan House passage of the various bills, which had been unanimously passed by the committee.
“President Trump was elected on the promise of finally making the government work better for working people,” Smith said in a statement Tuesday. “This bipartisan legislation helps fulfill that mandate and makes improvements to tax administration that will make it easier for the American people to file their taxes. Those who are rebuilding after a natural disaster particularly need help filing taxes, which is why this set of bills lightens the load for taxpayers in communities struck by a hurricane, tornado or some other disaster. With Tax Day just a few days away, we must look for common-sense, bipartisan ways to make filing taxes less of a hassle.”
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