Us Congress 2025-2026 Regular Session

Us Congress House Bill HB523

Introduced
1/16/25  

Caption

Permanent Tax Cuts for American Families Act of 2025 This bill makes permanent the increased standard tax deduction amounts enacted in 2017 as part of the Tax Cuts and Jobs Act. Under current law, the standard tax deduction consists of a statutory base amount that is adjusted annually for inflation. For tax years 2018-2025, the Tax Cuts and Jobs Act increased the standard tax deduction statutory base amounts to $24,000 (from $6,000) for joint filers, $18,000 (from $4,400) for head-of-household filers, and $12,000 (from $3,000) for single filers, which almost doubled the inflation-adjusted standard tax deduction amount for most taxpayers.Under the bill, the increased standard tax deduction statutory base amounts of $24,000 for joint filers, $18,000 for head-of-household filers, and $12,000 for single filers are made permanent. The bill also makes permanent the annual adjustments to such amounts for inflation.

Impact

The proposed legislation is expected to significantly impact tax revenue at the federal level, effectively changing the way taxpayers calculate their taxable income. By increasing the standard deduction, fewer individuals will be itemizing their deductions, which can lead to a simplification of tax filing. This change may also lessen the administrative burden on the IRS, as having fewer itemizers could streamline tax compliance processes. However, there are concerns from some fiscal analysts who argue that this could lead to reduced federal revenue, impacting funding for social programs and public services.

Summary

House Bill 523, known as the Permanent Tax Cuts for American Families Act of 2025, proposes to permanently increase the standard deduction outlined in the Internal Revenue Code of 1986. This bill seeks to raise the standard deduction from $4,400 to $18,000 for single filers and from $3,000 to $12,000 for married couples filing jointly. By making these changes permanent, the bill aims to alleviate tax burdens for families, thereby attempting to enhance disposable income for average households.

Contention

Notably, the bill has faced opposition from those who believe it favors wealthier individuals disproportionately. Critics contend that by increasing the standard deduction while limiting other tax deductions, the bill may not provide proportional benefits across different income strata. There is also a debate regarding the effectiveness of such tax cuts in stimulating economic growth, as opponents argue that direct payments or investment in public services might yield better results. Supporters, however, assert that easing tax burdens for families will promote consumer spending, contributing positively to the economy.

Congress_id

119-HR-523

Policy_area

Taxation

Introduced_date

2025-01-16

Companion Bills

US HB137

Related bill TCJA Permanency Act

Previously Filed As

US HB3270

Permanent Tax Cuts for American Families Act of 2023

US HB109

This bill allows an individual taxpayer a deduction from gross income for insurance premiums paid for the health care coverage of the taxpayer and the taxpayer's spouse and dependents. The bill makes the deduction available whether or not the taxpayer itemizes other deductions.

US HB338

Permanently Repeal the Estate Tax Act of 2023 This bill repeals the federal estate tax, effective for estates of decedents dying after December 31, 2022.

US HB318

Protecting Homeowners from Disaster Act of 2023 This bill repeals the current limitation on tax deductions for personal casualty losses. Under current law, such losses are deductible in taxable years 2018-2025 only to the extent that they are attributable to a federally declared disaster.

US HB108

Small Business Prosperity Act of 2023 This bill modifies the tax deduction for qualified business income to (1) make such deduction permanent, (2) limit to 21% the top tax rate on qualified business income, (3) repeal the limitation on the deduction based on amount of wages paid, and (4) revise the definition of qualified trade or business to mean any trade or business other than the trade of business of performing services as an employee. The bill provides that a change in the organizational structure of a corporation is not a taxable event if there is no change among the owners, their ownership interests, or the assets of the organization, The bill repeals the estate tax after 2022.

US HB176

This bill allows a deduction from gross income (above the line deduction) for attorney fees and court costs awarded with respect to a qualifying wildfire disaster (i.e., any forest or range fire that is a federally declared disaster, occurs in a disaster area, and occurs in 2015 or later). The bill excludes from the gross income of a taxpayer, for income tax purposes, amounts paid to compensate victims for losses or damages in connection with a qualifying wildfire disaster.

US HB161

Prioritizing Troops Over Tax Collectors Act of 2023 This bill establishes the rate of basic pay for a member of the uniformed services at the minimum amount of $31,200. It transfers unobligated amounts made available to the Internal Revenue Service (IRS) by the Inflation Reduction Act of 2022 for enforcement activities to pay for the increase in basic pay. The bill also prohibits the IRS from hiring additional employees until the increase in the rate of basic pay is implemented.

US HB160

SALT Fairness Act of 2023 This bill repeals the temporary restrictions in taxable years 2018 through 2025 on the deductibility of state and local taxes.

US HB393

Modern GI Bill Act This bill authorizes individuals who are entitled to educational assistance under the Post-9/11 GI Bill to apply amounts of such assistance to repay federal student loans for up to 36 months. The bill sets a cap and annual cost-of-living increases for the amount of educational assistance that may be paid to an individual under this bill during FY2024 and the following years.

US HB339

SALT Marriage Penalty Elimination Act This bill increases from $10,000 to $20,000 the amount that a married couple filing a joint tax return may deduct as state and local taxes (thus eliminating the tax effect known as the marriage penalty with respect to the deduction).

Similar Bills

No similar bills found.