The Tax Cut and Jobs Act is set to expire next year. What that means for Coloradans.
Campaign season is in full swing, and as American voters elect a new president in November, there are inevitable changes coming to our taxes.
Robert Persichitte, CFP, PFA, affiliate professor for MSU Denver says that's part of what makes this election significant.
"From a tax perspective, it is a very important election because the Tax Cut and Jobs Act that we got under the first Trump administration is set to expire in 2025."
Persichitte also says it's nothing new to see tax breaks expire.
"Starting in the year 2026, we may have completely new tax rules. This is the most comprehensive change to the tax system really since the 80s. Where it's going to be the most impactful is for large corporations. It's also anyone who pays taxes. And it changes just about everything: how people buy houses, how your mortgage impacts your taxes, how your children impact your taxes. Not just income but business and corporate taxes and estate taxes. So, if you own a home those deductions change, your tax rates change, and everything changes back to the old system if nobody does anything. The good news is, someone is probably going to do something. They're not just going to let it expire completely."
Right now, there's no concrete answer as to what's in the future. "It might be a question mark for the next year and a half."
However, it could mean good news for those already working to make ends meet. In his opinion, there are several possibilities and, in his opinion, two that are most likely. "We're likely going to see an expansion of that Tax Cut and Jobs Act, where we get a further reduction of the corporate tax rate. That's if the Republicans gain control of both the legislative and executive branch. We'd likely see a partial expiration if the Democrats were able to take care of both. For those with incomes above $400k, that they would see their taxes go up. $400k or lower, you see your taxes stay the same."
