Key provisions of the Tax Cuts and Jobs Act expire after December 31, 2025 — potentially raising taxes for most Americans starting in 2026. Here’s what changes and how to prepare regardless of what Congress does.
Tax Rate Changes
| Tax Bracket | TCJA Rate (Current) | Post-Expiration Rate | Increase |
|---|---|---|---|
| 10% | 10% | 10% | No change |
| 12% | 12% | 15% | +3% |
| 22% | 22% | 25% | +3% |
| 24% | 24% | 28% | +4% |
| 32% | 32% | 33% | +1% |
| 35% | 35% | 35% | No change |
| 37% | 37% | 39.6% | +2.6% |
Impact on Typical Households
| Household | Income | TCJA Tax | Post-Expiration Tax | Annual Increase |
|---|---|---|---|---|
| Single, no kids | $50,000 | $4,168 | $5,569 | +$1,401 |
| Single, no kids | $75,000 | $8,768 | $10,969 | +$2,201 |
| Married, 2 kids | $100,000 | $5,836 | $8,419 | +$2,583 |
| Married, 2 kids | $150,000 | $15,036 | $19,419 | +$4,383 |
| Married, no kids | $200,000 | $25,936 | $32,235 | +$6,299 |
| Single | $250,000 | $47,407 | $55,482 | +$8,075 |
Estimates assume standard deduction, no complex deductions.
Key Provisions That Expire
| Provision | TCJA (Current) | Reverts To |
|---|---|---|
| Standard deduction (single) | $15,000 | ~$8,300 (adjusted) |
| Standard deduction (married) | $30,000 | ~$16,600 (adjusted) |
| Child Tax Credit | $2,000/child | $1,000/child |
| State/local tax (SALT) deduction | Capped at $10,000 | Unlimited |
| Mortgage interest deduction | $750K limit | $1M limit |
| Estate tax exemption | ~$13.6M/person | ~$7M/person |
| Personal exemptions | Eliminated | Restored (~$5,300/person) |
| QBI deduction (pass-through) | 20% deduction | Eliminated |
How to Prepare (Regardless of Congress)
| Strategy | Who Benefits | Action |
|---|---|---|
| Accelerate income into 2025 | Everyone who can | Bonuses, Roth conversions before rates rise |
| Roth conversions | High earners with traditional IRAs | Convert while rates are lower |
| Defer deductions to 2026 | Itemizers | Bunch charitable giving, medical expenses into 2026 |
| Maximize SALT planning | High-tax state residents | SALT cap may be lifted (benefit of itemizing returns) |
| Estate planning | Net worth >$7M | Gift assets before exemption drops |
| Review withholding | W-2 employees | Adjust W-4 if rates increase |
| Max out QBI deduction | Business owners, freelancers | Maximize pass-through deduction while available |
Bottom Line
Whether TCJA is extended, partially extended, or expires, you should prepare for higher tax rates. The most impactful moves: do Roth conversions while rates are still low, maximize the QBI deduction if you’re self-employed, and review your estate plan if your net worth is above $7 million. Even if Congress extends some provisions, the tax landscape will shift — stay informed and flexible.
See our 1099 tax guide or financial planning in your 20s for more tax planning.
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