Here are key lessons from Trump's 2017 tax overhaul, which may provide insight into the uncertainty surrounding his 2025 tax plan.

• Uncertainty about taxes looms in 2025 as Congress struggles with the expiration of trillions in tax cuts signed into law by President-elect Donald Trump in 2017.
• In the upcoming year, Republican legislators intend to tackle the expirations through a procedure called "reconciliation," which circumvents the filibuster.
• Experts suggest that while pending legislation presents challenges for tax planning, there are lessons to be learned from Trump's first tax package.

As Congress prepares to discuss President-elect Trump's economic plan, uncertainty about taxes looms in 2025.

Financial experts suggest that investors could learn from Trump's 2017 tax overhaul.

Trump promised to maintain the trillions of tax cuts he introduced through the Tax Cuts and Jobs Act in 2017, which resulted in significant changes for individuals and businesses during his campaign.

He advocated for new policies, including tax-free tips, ending taxes on Social Security benefits for seniors, and removing the SALT tax cap, among others.

In 2025, there will be significant changes to 401(k) plans that savers need to be aware of. Additionally, colleges are facing unprecedented challenges and may close in the next five years. Lastly, a chart has been created to provide an inflation breakdown for November 2024.

The uncertainty surrounding which proposals will be implemented from Trump's agenda, particularly in light of concerns over the federal budget deficit, makes it more difficult to plan for tax changes.

Experts believe that there are still lessons to be gleaned from Trump's 2017 tax bill.

Last-minute tax strategies

The TCJA enacted trillions of tax breaks that will expire after 2025, including lower tax brackets, bigger standard deductions, a more generous child tax credit, and a higher estate and gift tax exemption, among other provisions.

Republican lawmakers plan to tackle the expiration of certain programs through the process of reconciliation, which allows them to bypass the filibuster.

Republicans used the same strategy to enact the TCJA in late December 2017.

Some investors employed last-minute strategies, such as "accelerating itemized deductions," by prepaying property taxes and state income taxes before the law's effective date on Jan. 1, 2018, according to Duncan Campbell, the leader of Baker Tilly's private wealth practice.

In high-tax states such as California, New Jersey, and New York, the move was widely accepted among top earners. However, these individuals will soon only be able to claim a federal deduction of $10,000 for SALT, which includes both property and state income taxes.

'Be ready and positioned' for changes

It is advised by many advisors to clients to postpone making any irreversible changes to their tax plans until the final signing of pending tax law provisions.

Ryan Losi, a certified public accountant and executive vice president of CPA firm Piascik, stated that his preference is always to choose what is certain to be true over what may be true in the future.

If Congress doesn't extend the higher estate and gift tax exemption limits after 2025, Losi advised clients to meet with an attorney to discuss strategies for reducing taxable estates above the current exemption.

In 2025, the basic exclusion amount will increase to $13.99 million per person, applicable to tax-free wealth transfers during life and at death. If it lapses, the exclusion will revert to 2017 levels, adjusted for inflation.

If Congress doesn't extend the larger exemptions, you want to be prepared and positioned to finalize your estate planning documents.

In 2017, there were several 11th-hour changes to the higher estate tax exemption, even though it was more likely to be extended under a Republican-controlled Congress.

Losi stated that there might be an unexpected Trump Christmas present.

Expect 'uncertainty' if legislation passes

The TCJA was enacted in December 2017, leaving advisors with limited time to analyze changes before January 1, 2018, according to Campbell of Baker Tilly.

Several newly enacted provisions were uncertain at that point, he said.

Campbell stated that there was confusion regarding the multi-step calculation for the qualified business income deduction, which allows pass-through businesses to deduct up to 20% of eligible revenue.

IRS guidance is often needed to clarify the specifics of legislation passed by Congress, which tax professionals frequently have questions about.