Don’t miss this quick overview of what to expect in 2025, as forecasted by Ren’s in-house tax expert, Joseph Gianforte:
Key tax changes:
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- Tax Cuts & Jobs Act (TCJA) Extensions: Many provisions from the 2017 tax reform will be extended through at least 2028, including:
- Individual tax rates (top rate remains 37%)
- Section 199A deduction for pass-through entities
- 60% AGI limit for cash contributions to public charities
- SALT Deductions: The $10,000 cap on state and local tax deductions will be doubled.
- Estate Tax Exemption: Reduced from $27.98M for married couples but will remain above $10M.
- Miscellaneous Deductions: Investment fees and similar deductions will still be nondeductible.
- Tax Cuts & Jobs Act (TCJA) Extensions: Many provisions from the 2017 tax reform will be extended through at least 2028, including:
IRS and government outlook:
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- IRS Budget Cuts: Expect significant impacts on IRS functions:
- Long wait times for calls
- Delayed processing of paper-filed returns
- Elimination of the Direct File service after 2025 due to lobbying by tax prep firms.
- Social Program Reductions: Significant cuts in government funding will impact housing, education, food assistance, and charities, particularly those working with vulnerable populations.
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- Charities will increasingly rely on large donations from wealthy individuals rather than smaller contributions.
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- IRS Budget Cuts: Expect significant impacts on IRS functions:
Economic and industry trends:
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- Stock Market: The S&P 500 is expected to grow by 30%, with tech and AI driving growth.
- Cryptocurrency: Bitcoin to surpass $150,000, though the crypto space remains largely unregulated.
- Accounting Sector: Increased AI adoption will reduce demand for entry-level accountants in audit and tax functions.
- Experienced CPAs will see higher demand.
- At least one state will eliminate the 150-credit hour requirement for the CPA exam, potentially setting a trend for others.
