Yahoo Finance Trump-Era Tax Cuts Are Set To Expire: 3 Ways This Can Impact Your Trip to the Grocery Store
Tax cuts that went into effect during the Trump administration are due to expire at the end of 2025, which isn’t exactly right around the corner but isn’t in the far-distant future, either.
A lot can happen between now and then — including Donald Trump winning re-election in his 2024 rematch against President Joe Biden and trying to extend the cuts. If and when the cuts expire, you could feel an impact at the grocery store, but mostly indirectly.
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The 2017 Tax Cuts and Jobs Act (TCJA) signed by Trump increased the standard deduction, lower corporate and estate tax rates and increased the child tax credit, The Hill reported. Some people were more affected than others by the cuts, and that will also be the case when the cuts expire.
As previously reported by GOBankingRates, this is what you can expect when the TJCA tax cuts expire:
Individual income tax rates will revert to their 2017 levels.
The 20% tax deduction for many pass-through businesses will disappear.
There will no longer be a cap on the state and local income tax (SALT) deduction.
There will be a reduction in the estate tax exemption.
The standard deduction (which many taxpayers take advantage of each year) will be roughly cut in half. The personal exemption will return while the CTC will be cut.
So how might these changes impact your trip to the grocery store? Here are three possibilities:
Higher Income Taxes
Income tax brackets will revert to their 2017 levels when the TCJA expires. This means you could see more taxes coming out of your paycheck, depending on your tax bracket.
With less take-home pay in your wallet, you’ll have less money to spend at the grocery store.
Fewer Deductions
With the standard deduction set to be cut in half, the child tax credit set to be reduced, and the cap on the SALT deduction due to expire, you will also be losing out on tax savings. Again, this means less money available for grocery shopping.
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The impact could be minimal for most Americans, however. In an analysis published last month, the Center on Budget and Policy Priorities suggested that the Trump tax cuts had the biggest positive impact on high earners. Households with incomes in the top 1% received an average tax cut of more than $60,000 in 2025, according to the Tax Policy Center. That compares to an average tax cut of less than $500 for households in the bottom 60%.
Small Business Deductions
One of the “major changes” that affect many small businesses and self-employed workers is the elimination of the qualified business income (QBI) deduction, The Hill reported. The QBI provided an up to 20% deduction for pass-through businesses such as partnerships, S corporations and sole proprietorships, gig economy workers and independent contractors.
Theoretically, losing this deduction might force small, independent grocers and small business suppliers to raise their prices, which could impact your grocery bills.
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This article originally appeared on GOBankingRates.com: Trump-Era Tax Cuts Are Set To Expire: 3 Ways This Can Impact Your Trip to the Grocery Store
