You can run your plan to see how it is impacted by different assumptions for current and future Federal tax policy related to the Tax Cuts and Jobs Act of 2017 (TCJA). The options are:
- Current Tax Law: This is our default setting. It applies the TCJA changes as written in law, which means many of the changes, such as reduced income tax rates, expire on December 31, 2025.
- TCJA Changes Made Permanent: This option assumes the TCJA changes that are set to expire in 2025 are instead made permanent by Congress.
- Tax Law Prior to TCJA: This option applies the tax rates and provisions that were in place prior to the TCJA.
- The option for "current tax law" includes the sunset on the tax cuts because that's how the current law is written, namely, the tax cuts expire at the end of 2025. That's the current tax law. Per current law, our taxes will go back up starting in 2026.
- However, some users wish to assume instead that the legislature will pass a new law to remove this expiration of tax cuts and make the tax cuts permanent. That's a more optimistic scenario, but not far fetched.
- The third option allows users to compare the old tax law prior to the 2017 TCJA to either of the other two.
Further Resources:
- Wikipedia Entry: Tax Cuts and Jobs Act of 2017
- Congress.gov Online Legislation Entry