What Made It Simpler
- Bigger Standard Deduction: The TCJA nearly doubled the standard deduction, making it more attractive for most taxpayers to avoid the complex world of itemized deductions.
- Fewer Itemize: Thanks to the bigger standard deduction, the number of people itemizing deductions dropped significantly, reducing overall complexity.
- AMT on Hold (for now): Raising the threshold for the Alternative Minimum Tax (AMT) meant fewer taxpayers had to deal with this confusing second tax system.
The Not-So-Simple Side
- Business Changes: While individual taxes got simpler, the TCJA introduced new business complexities, like the 20% pass-through deduction with its compliance hurdles.
The Bottom Line
- Overall Savings: Despite some business complexities, the TCJA likely reduced compliance costs for individual filers by billions.
- Potential Backslide: If the TCJA provisions expire, millions could be pushed back into complex filing situations.
- Modernization Matters: Letting the individual provisions of TCJA expire could also hinder the IRS’s new Direct File program for simple tax returns.
What This Means for You:
- Keep an eye on what happens with the TCJA in 2025. Expiring provisions could complicate your filing next year.
- Talk to a tax professional if unsure which deduction option (standard or itemized) is best for you.
