Wealth Insights

Countdown to tax changes?

Will the clock be stopped before the 2017 tax cuts expire?

Many taxpayers benefited from the Tax Cuts and Jobs Act (TCJA) of 2017, which ushered in such changes as lower income tax rates, higher standard deductions and increased gift and estate tax exemptions. However, select provisions of the TCJA are scheduled to expire on Dec. 31, 2025. “If you’re wondering how that might affect you, you are not alone,” says Maya Brill, Senior Wealth Strategist for Regions Bank. “Now is the time to consider some of those provisions set to sunset if Congress takes no action.” Here’s where to start:

Estate, gift and generation-skipping transfer tax exemptions

These exemptions determine the amount of assets a person can transfer without paying transfer taxes. The TCJA reset 2011’s base amount from $5 million to $10 million and indexed for inflation. For 2025, the amount is $13.99 million per person ($27.98 million per couple).

In 2026, the exemptions are scheduled to revert to an estimated $7 million. “This may well be a use-it-or-lose-it situation,” says Brill.

• What taxpayers can do: Consider transferring wealth to irrevocable trusts. This may help you use the exemption amount while still maintaining a degree of control over assets.

Top income tax rates

The TCJA reduced the top individual tax rate from 39.6% to 37%. However, in 2026, the rate reverts to 39.6%.

• What taxpayers can do: Families in the highest tax bracket may find it beneficial to accelerate income—if possible.

Itemized deductions

The TCJA suspended and/or capped most miscellaneous itemized deductions and increased the standard deduction ($15,000 for individuals and $30,000 for joint filers in 2025).

Many taxpayers maximized their deductions by adjusting the timing of deductible expenses. “Bunching enough deductions into a single year to exceed the standard deduction allowed taxpayers to receive the benefit of itemizing,” says Brill.

• What taxpayers can do: With the sunset approaching, careful consideration should be given to whether accelerating deductible expenses for bunching purposes is more advantageous than deferring deductions to 2026 when tax rates could be higher.

Everyone’s situation is unique. It is important to speak with your tax professional about how the sunsetting provisions could interact with each other and affect your tax position.

Talk to your Regions Wealth Advisor about:

1. How you can maximize your tax planning strategies this year.
2. What potential changes you should consider for the coming years.

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