The slim margins, trillions of dollars in tax cuts at stake and key missing details add up to great reasons for financial advisors and their clients to contact their members of Congress.

“Now’s the time to be doing it, because they’re starting to put together the legislation now,” said Mary Burke Baker, a government affairs counselor and the leader of the tax policy practice of law firm K&L Gates. “It’s important to let them know what’s important.”

That’s because every Republican member of Congress could exercise outsize influence on the process as President Donald Trump’s party extends the expiring provisions of the 2017 Tax Cuts and Jobs Act. Even though no one expects any steep tax increases as Congress confronts its year-end deadline, Burke Baker acknowledged that it “has to be difficult to advise clients to the extent that you can advise clients” on questions that may affect their payments to Uncle Sam — without any definitive answers until the passage of a bill that has yet to be written.

The elusive law appears far away from the finish line. Republicans are debating among themselves about how much they are willing to expand the federal budget deficit and whether they should pursue other priorities first. The intraparty squabbling could even provide an opening for Democrats to change the entire equation, if Trump, House Speaker Mike Johnson and Senate Majority Leader John Thune fail to align the GOP behind a way forward.

As they aim to prepare clients’ for the unknown possible impacts to say, estate taxes, deductions for state and local duties, Trump’s campaign promises or any number of other wish-list items among various constituencies, advisors could drive themselves crazy trying to stay abreast of every phase of an inevitably complicated political endeavor. 

Instead, they should be counseling clients about “avoiding the temptation to act based on the news” of any particular day in the Beltway, said Ben Henry-Moreland, a former advisor who’s a senior financial planning nerd with the Kitces.com blog. While he said he doesn’t see “a high probability” that the current exemptions to the estate tax might revert to a lower level, Henry-Moreland suggested that advisors discuss the possibility with clients and prepare any necessary documents before December, just in case. If there are alterations to estate taxes in particular, they could find it incredibly difficult to draft new documents in a rush.

“It’s not necessarily, ‘Oh, here’s what X and Y congressmen are saying,’ but more, ‘Let’s take the big picture and figure out, is it really going to help you to act based on what you’re hearing on the news now, versus waiting until we’re going to know a little bit more?'” Henry-Moreland said. “Otherwise the documents can go in the shredder. It’s good to have some amount of flexibility, but you probably don’t want to make too many commitments yet.”

READ MORE: 26 tips on expiring Tax Cuts and Jobs Act provisions to review before 2026

Pressing numbers

At this point, Trump and Congressional GOP leaders are also looking for leeway as they search for common ground on the cost of the legislation, possible tax expenditures that add to it or potential spending cuts that take away from it. To pass the law, they must navigate any number of twists and turns in coming months, with detours to keep every faction aboard and moving on a budgetary path that hasn’t even been laid out. For advisors and clients wondering how they’ll get to the ultimate destination, Republicans have barely embarked on their journey.  

House and Senate budget resolutions tabbed the cost of tax legislation at north of $4 trillion over the next decade, but Trump’s plans may come with a price tag between $5 trillion and $11.2 trillion. Even if lawmakers let the Tax Cuts and Jobs Act provisions expire, the national debt is on pace to top its prior record of 106% of gross domestic product in 2029 and trigger so-called bond vigilantes’ ever-higher interest rates that would curtail economic growth. The arguments that new tariff revenue or higher federal receipts due to economic expansion from the tax cuts hold more sway among the White House and its allies than with budgetary experts. 

To the toughest fiscal watchdogs, the mere $2 trillion in spending cuts over a decade in the House budget plan would only amount to a quarter of the necessary reductions, according to Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, a bipartisan-led nonprofit policy research organization.

“For anyone who has made the case they support lower government spending, this is a pretty puny number, which is pretty darn close to a rounding error,” MacGuineas said in a statement. “It would be far better to use these savings as part of a larger debt reduction deal than to offset tax cuts. We have cut taxes and increased spending year after year since the last budget surplus in 2001, which is how our debt got so out of control. Lawmakers now need to face the reality that we should be adopting a debt deal rather than pursuing tax cuts or spending increases.”

But Republicans are not likely to abandon the main tax plank of their official campaign platform. In a speech on economic issues last fall, Speaker Johnson vowed to “keep those cuts in place to support job creation, along with the doubled guaranteed deduction and a strong child tax credit.” Last month, Majority Leader Thune introduced a bill called the “Death Tax Repeal Act” while expressing the hope that Congress “will not merely extend this exemption, but that we will get rid of this fundamentally flawed tax once and for all.” 

Trump pledged frequently on the campaign trail to extend and expand the tax cuts, but the lofty goals of his administration and those of Trump’s allies in the conservative Project 2025 blueprint are now facing the political and fiscal calculus of passing major legislation through Congress. Trump has displayed a willingness to separate taxes from other legislative priorities, even if he has a clear preference.

“Well, I like one big beautiful bill. I always have. I always will. But if two is more certain, it does go a little bit quicker, because you can do the immigration stuff early,” he said in January.

READ MORE: Economists want to trash the QBI deduction       

Devil in details

Despite some earlier talk of passing the legislation by May, the “latter half of the year” sounds like a much better estimate for the timing, according to Erica York, the vice president of federal tax policy at the nonpartisan, nonprofit Tax Foundation’s Center for Federal Tax Policy.

“Congress tends to act at the last minute,” York said. “In an ideal world, we would get this taken care of very quickly, in a fiscally responsible way, so that people would have the certainty to make decisions. I think this will be a very long, drawn-out process, given the slim majority in the House.”

And the cost could balloon well above $7 trillion, if lawmakers include Trump’s other priorities such as ending taxes on tips and Social Security benefits or creating a deduction for the interest on auto loans for American-made cars, according to Jonathan Traub, a managing principal and the leader of the Tax Policy Group at consulting and professional services firm Deloitte Tax. In their recipe for tax cuts and spending pullbacks that go far beyond any undertaken by Elon Musk’s efforts, lawmakers are effectively trying to come up with a solution to the problem of, “‘How do you fit 7 trillion pounds of sugar into a $2 trillion sack,'” Traub said.

Take the deduction for state and local taxes, which, conveniently, is often referred to as SALT. Currently, taxpayers may deduct up to $10,000 — a level that Republicans from high-tax states such as New York and California say is too low. Trump, Johnson and Thune will need nearly all of those votes to pass the bill if they are going to do so without any Democrats’ support. 

Using figures and policy options from guidance document compiled in January by Republicans on the House Ways and Means Committee, lawmakers could: double that limit for married couples at a cost of $100 to $200 billion over a decade; boost it to $15,000 for individuals and $30,000 for married couples ($500 billion); make only property taxes deductible but eliminate deductibility for income and sales taxes ($300 billion); get rid of the deduction for corporations to create $310 billion in savings against the cost; or eliminate the SALT deduction entirely to raise $1 trillion in revenue over a decade. 

The issue “breaks down on regional lines” rather than ideological ones, which explains why the SALT discussion has been so hard for leaders of both major parties, Traub said.

“I don’t envy anybody in that process,” he said. “It’s a really difficult challenge. It has vexed leaders for years, and it will keep vexing them this year, as well.”

The idea of repealing the tax credits for green energy investments that President Joe Biden and the Democrats put in place through the Inflation Reduction Act could deliver savings of $800 billion and fit nicely into the Trump administration’s stated goal of slashing government spending for climate change. However, that may threaten manufacturing jobs and other economic benefits connected to projects in many Republican districts, according to Joe Hughes, a senior analyst for the Institute on Taxation and Economic Policy, which provides “data-driven recommendations to shape equitable and sustainable tax systems.” So cutting them could be tricky, as well.

“It would only pay for maybe about a third of the tax cuts to the wealthy,” Hughes said. “That issue is going to be awkward for Republican lawmakers, but I would highlight that as the biggest pay-for that they can come up with.”

READ MORE: A tax deduction for financial advice? Why chances are murky

What to watch in coming months

For policy experts, the next important step will come with the requirement that Congress must agree to “identical budget resolutions” in both chambers, with instructions about whether the Senate will take up one or two bills subject to so-called reconciliation bills, Burke Baker said. That’s a Senate procedure enabling the passage of a bill with only a majority of 51 votes, rather than the 60 necessary to overcome a filibuster. 

With Trump’s support, the House GOP is pursuing a “one big, beautiful bill” strategy encapsulating tax cuts as well as border security and other priorities. Republicans in the Senate are pushing for two reconciliation bills, which would delay passage of any tax legislation until later in the year. Burke Baker and other experts say that the longer it takes for the two chambers to reach agreement on a budget resolution, the more likely it will be for the Senate to prevail in waiting on the tax cuts until later in the year.

“It’s going to be difficult, even if both chambers were really rowing in the same direction,” she said. “It’s just a terribly complicated topic, and, if any of these issues were easier, they would have been taken care of earlier, and we wouldn’t even be talking about them right now.”

The procedural and policy topics could morph the debate into something altogether different if they stretch longer into the year. Otherwise, any tax changes are likely to fall “mostly on the corporate side” rather than on provisions affecting individual retail wealth management clients, Traub said. To him, repeal of green energy credits and deductions for corporate SALT and highly paid executives or an excise tax on stock buybacks would be more probable than any shifts in policies for municipal bond investments or mortgage interest. 

If the Republican talks fall apart completely and lawmakers face the prospect of raising taxes in the year of a midterm election, the deduction for qualified business income for pass-through entities or even higher rates for some taxpayers could come up for debate if any Democrats’ votes are required for passage, Traub said.

“There’s a variety of things they could demand,” he said. “The universe of what is possible becomes quite a bit more dramatic.”

READ MORE: Why tax-related services drive business for RIAs

The bottom line

That scenario would represent a shocking outcome, though, for advisors and clients who don’t have much reason to expect a big tax hit from the legislation. Wealthier households will get more benefits from extending the expiring Tax Cuts and Jobs Act provisions than those with less than $400,000 in annual income. In a parallel universe, proposals such as raising corporate tax rates, placing foreign income of U.S. corporations in the same bracket as their domestic earnings or repealing the “Gingrich/Edwards loophole” may be on the table, Hughes said.   

“There are plenty of options out there, and those are the sort of things that Republicans would be looking at and discussing if they were remotely serious about some sort of deficit-neutral tax reform,” he said. “There’s no goal of actual tax reform or of really helping the middle class here. The main goal here is to provide tax cuts to very wealthy individuals.” 

Regardless, the complexities signal that there is “a good chance at this point” that passage of any bill waits until December, according to Henry-Moreland. Republicans won the trifecta with control of both houses of Congress and the White House, but passing a law entails much more than a simple agreement to push back the sunset date of the current rules under the Tax Cuts and Jobs Act or make them all permanent, he noted.

“I still don’t think that this bill is going to be a straight-up extension of TCJA. We have a different group of legislators, and we have different political and economic environments right now,” Henry-Moreland said. “There are so many moving pieces and so many different priorities right now. It’s going to be more of a TCJA replacement than an extension, per se.”

The debate currently revolves around factions among Republicans that are “pulling in the opposite direction,” with one seeking higher itemized deductions and the other trying to reduce the deficit, York said. The push-pull between them and Trump’s influence could leave advisors and their clients guessing until the end of the year.

“For each provision, you have a set of constituents who are vested in that provision existing, so it makes it politically difficult to say, ‘We’re going to cut it,” said York. “A dollar for something means a dollar less for something else.”