The Tax Cuts and Jobs Act: What's Expiring in 2025 and What It Means for You

In 2017, Congress passed the Tax Cuts and Jobs Act (TCJA)—the most sweeping overhaul of the US tax code in three decades ^[1]. Many of its provisions were made temporary, with a sunset date of December 31, 2025 ^[1], ^[2]. Unless Congress acts, most individual tax provisions will revert to pre-2017 law on January 1, 2026 ^[1], ^[7].

For ordinary Americans, this is not an abstract legislative detail. It could mean a significantly higher tax bill ^[7], ^[9].

What Changes Under Current Law if TCJA Expires

Standard Deduction. The TCJA roughly doubled the standard deduction ^[1], ^[7]. If it expires, the deduction amounts will revert to their pre-2017 levels, adjusted for inflation ^[1], ^[9]. Most Americans who currently take the standard deduction would face a higher taxable income as a result ^[1].

Tax Brackets. The TCJA lowered rates across several brackets, including reducing the top marginal rate from 39.6% to 37% ^[1], ^[7]. If the TCJA expires, federal income tax rates are scheduled to revert to the previous structure: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6% ^[7].

Child Tax Credit. The TCJA doubled the child tax credit to $2,000 per child and expanded the refundable portion ^[1], ^[7]. Expiration would return the credit to $1,000 per child ^[1].

State and Local Tax (SALT) Deduction. The TCJA capped SALT deductions at $10,000 ^[1]. If the cap expires, the limitation on these deductions would be lifted, which would primarily impact taxpayers in high-tax states ^[1], ^[9].

Alternative Minimum Tax (AMT). The TCJA significantly increased the AMT exemption and phase-out thresholds, shielding many middle-to-upper-middle-class taxpayers from the parallel tax system ^[1]. Expiration would lower these exemptions, potentially exposing more taxpayers to AMT liability ^[1].

What Is Permanent

Not all TCJA changes were temporary. The corporate tax rate cut—from 35% to 21%—was made permanent ^[1]. Other business-related provisions have varying expiration dates, with some scheduled to phase out or change between 2025 and 2028 ^[1], ^[2], ^[10].

What Might Happen

Congress is actively debating the extension of various TCJA provisions ^[1], ^[4]. The Congressional Budget Office (CBO) has estimated that a permanent extension of all expiring individual provisions would increase federal deficits by approximately $4.6 trillion over a 10-year period ^[1]. The final outcome remains subject to ongoing legislative negotiations ^[7], ^[9].

How to Prepare

Maximize 2025 tax advantages while they are certain. Contributions to traditional 401(k) and IRA accounts allow you to lock in deductions at current tax rates ^[3].

Review your withholding. If tax rates or brackets change for 2026, your current W-4 withholding may no longer be accurate ^[3]. Updating your withholding early can help prevent an unexpected tax bill in April 2027 ^[9].

Watch the SALT cap. If you live in a high-tax state and typically itemize your deductions, the future of the SALT cap will significantly influence your tax planning strategy ^[9].

Consult a tax professional before year-end 2025. Decisions regarding the timing of income (accelerating or deferring), exercising stock options, or making charitable contributions may be meaningfully affected by the tax laws applicable in 2026 ^[9].