The Tax Cuts and Jobs Act of 2017 (TCJA) is the informal name for a major overhaul of the Internal Revenue Code of 1986, signed into law by President Trump in 2017. It introduced broad changes across individual, corporate, and international tax rules. Key provisions included lowering the corporate tax rate, nearly doubling the standard deduction, and raising the estate tax exemption.
Most individual tax changes were temporary and scheduled to expire after 2025, though many have since been extended or made permanent by the One Big Beautiful Bill Act of 2025. One notable extension raised the cap on state and local tax (SALT) deductions from $10,000 to $40,000 through 2029.
The TCJA revised individual income tax brackets, reducing rates to 10%, 12%, 22%, 24%, 32%, 35%, and 37%, and modestly increased the income thresholds. It nearly doubled the standard deduction, which reduced the number of itemizers. It also limited the mortgage interest deduction to $750,000 of debt, capped SALT deductions at $10,000, and eliminated many miscellaneous itemized deductions. Most of these provisions are set to expire after 2025, except for the removal of the Affordable Care Act’s individual mandate penalty.
For businesses, the TCJA permanently reduced the corporate tax rate from 35% to 21%. It created a 20% deduction for most pass-through business income (excluding some service providers), allowed 100% bonus depreciation on certain business assets through 2022, and expanded expensing limits. It also restructured international tax rules by excluding certain foreign-earned dividends from U.S. taxation and targeting base erosion through new anti-abuse provisions. See: 26 U.S. Code § 59A - Tax on base erosion payments of taxpayers with substantial gross receipts.
[Last reviewed in July of 2025 by the Wex Definitions Team]