Tinkering with the U.S. Tax Code is seemingly a hobby for elected officials in Washington, D.C. In 2017, the newly minted Trump (45) Administration was determined to make changes far beyond tinkering. The goal was to reform the Tax Code, cut taxes for nearly all Americans, including corporations, and make filing our Tax Returns easier through simplification. It worked reasonably well.

Then House Speaker Paul Ryan had a dream wherein most Americans could file their annual Tax Returns “on a postcard.” When the resultant Tax Cuts and Jobs Act of 2017 (TCJA) was passed, Ryan claimed victory on his lifelong dream.

Anyone who has ever prepared a Tax Return understands that little could be further from the truth. Shortening Page 1 of the 1040 Individual Return by adding pages of Schedules and Forms did little or nothing to make Tax Returns shorter.

On a brighter note, a parallel goal of TCJA was to cut the number of taxpayers utilizing Itemized Deductions, in favor of selecting a new, larger, Standard Deduction. In this pursuit, lawmakers were extremely successful, as 61% of former itemizers switched to using the Standard Deduction. For these taxpayers, recordkeeping was greatly simplified.

Fast forward to 2025, and the second Trump (47) Administration is once again touting changes to the U.S. Tax Code. Congress is fighting it out in both chambers, and the exact result will likely not be unveiled until early summer. At this moment, some changes seem inevitable. Information being leaked from inside Congress is pointing to at least one change that could require preparation for affected taxpayers to take full advantage of the change.

TCJA limited the State and Local Tax (SALT) Deduction to $10,000 annually for every taxpayer, who can be a single filer or a married couple filing jointly. For people in high-tax states, this limit caused many citizens to switch over to the Standard Deduction. Since the SALT deduction limit is likely to be increased dramatically, some of these folks will find itemizing to be practical again.

Itemizing deductions requires far more comprehensive record-keeping substantiating claims made on Personal Tax Returns. No one can tell yet when the new SALT limit will apply, but there is a chance that it will be effective for Tax Year 2025. On that chance, anyone who is close to being able to itemize should be paying close attention to their own organizing and record-keeping.

These changes will mostly apply to high-income taxpayers living in high-tax states. However, people with expensive homes, high medical expenses, and/or large purchases (such as vehicles), there may present an opportunity for savings.

As soon as final regulations are released, including both actual provisions and application dates, we will report to our readers and listeners. Maximizing benefits from the latest round of tax reform will take many shapes, and we can assist your tax planning (not tax preparation or advice) efforts along the way.