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Planning Your Moonshot
Do you know what a moonshot is? In baseball, it's a homerun that is so big that it's almost unbelievable, for Elon Musk it's colonizing Mars, for us it's building a personal finance community on four pillars, growth, design, community, and transparency. What's your moonshot? Explore it with us and let us help lead the way through personal finance, business, and personal development conversations.
Planning Your Moonshot
How to Plan for the Expiration of the Tax Cuts and Jobs Act Now!
Hello, everyone, and welcome to the brighter finances podcast. My name is Louis Guajardo, I am the founder of Brighter Days Planning and the lead financial planner. We would first like to thank you for taking some time out of your day to listen to our new episode, were excited to have you here! We promise to provide you with valuable information every time you tune into our show.
In today's episode, Louis will be giving some ideas to walk through when it comes to planning for the tax cuts and jobs act (TCJA) sunset coming in 2026.
Some of the ideas we discussed included:
- What is the TCJA & why did it pass
- The TCJA was essentially an overhaul of the prior tax code which was signed by president Donald Trump. It provided many great tax benefits for every day Americans, small businesses, and big corporations.
- Benefiting from Potentially Lower Income Tax Brackets
- One benefit that the tCJA provided was lowering the income tax brackets for individuals and families. This will sunset and is likely to increase the tax brackets in 2026.
- Standard Deduction and Credits
- The standard deduction was also nearly doubled which led to a decrease in the amount of itemizing tax returns. Another thing that led to a decrease in itemization was the limit of $10,000 on the state and local income tax deduction (SALT).
- Estate and Gift Tax
- The biggest change here was probably the increase to the lifetime exemption, previously $5.49 million doubling to $11.18 million.
- Qualified Business Income
- QBI was a brand new deduction offered by the TCJA for years 2017-2025 and may very well expire in 2026.
- Bonus Depreciation on Qualified Property
- What this rule allowed was for businesses to take depreciation of 100% instead of the prior 50% for business property placed into service between 2017 and 2022
- 80% for property placed in service after Dec. 31, 2022, and before Jan. 1, 2024;
- 60% for property placed in service after Dec. 31, 2023, and before Jan. 1, 2025;
- 40% for property placed in service after Dec. 31, 2024, and before Jan. 1, 2026;
- 20% for property placed in service after Dec. 31, 2025, and before Jan. 1, 2027; and
- 0% (bonus expires) for property placed in service after Dec. 31, 2026.
- What this rule allowed was for businesses to take depreciation of 100% instead of the prior 50% for business property placed into service between 2017 and 2022
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