Many tax changes ushered in by the Tax Cuts and Jobs Act of 2017 (TCJA) are set to expire at the end of this year. There’s a lot to unpack about what this means for you and your tax planning.

Let’s walk through the basics, including what’s on the table and how it could affect you, depending on what legislation Congress and President Trump ultimately push through.

When will the Tax Cuts and Jobs Act expire?

As the largest tax code overhaul in decades, the TCJA lowered tax rates, modified tax brackets, increased the standard deduction, and created new deductions while limiting or eliminating others (just to name a few).

But here’s the catch: most changes impacting individual tax returns will expire on December 31, 2025, unless Congress passes legislation to extend or make them permanent. This “sunset” means many tax benefits you’ve gotten used to could go back to pre-2018 rules if lawmakers don’t act.

While we don’t have a crystal ball, President Trump has talked about extending certain aspects of the TCJA beyond 2025. And with his party also controlling the House and Senate, there’s a good chance he’ll be able to do it.

What provisions might be extended?

Here’s a rundown of some key TCJA provisions that could stick around if Congress and the new administration move to extend or make them permanent.

1. Income tax rates and brackets. Currently, the TCJA offers lower individual income tax rates across the board and wider income tax brackets. If extended, these rates and brackets continue, albeit adjusted for inflation each year.
2. Higher standard deduction. The TCJA nearly doubled the standard deduction, simplifying filing for many taxpayers. Today, roughly 90% of taxpayers claim the standard deduction. Without action, the deduction would shrink, pushing many back into itemizing their deductions. However, President Trump has indicated he would make this aspect of the TCJA permanent.
3. Personal exemptions. Before the Tax Cuts and Jobs Act, taxpayers could claim a personal exemption for themselves, their spouses, and dependents, although the personal exemption phased out for high-income taxpayers. The TCJA eliminated personal and dependent exemptions, but they could reappear if the law sunsets without renewal.
4. Child Tax Credit and Credit for Other Dependents. The Tax Cuts and Jobs Act increased the child tax credit from $1,000 to $2,000 per child and added a $500 credit for other dependents. A permanent extension would keep these credits at current levels. On the campaign trail, Vice President JD Vance floated the idea of increasing the Child Tax Credit to $5,000, although the campaign didn’t confirm support for this proposal.
5. Changes to itemized deductions. The Tax Cuts and Jobs Act made several changes to itemized deductions.
   • SALT cap. The TCJA capped state and local tax deductions, including those for property taxes and state income taxes or sales taxes, at $10,000 per return. Many states enacted pass-through entity tax (PTET) workarounds to help owners of pass-through businesses avoid this cap.
   • Mortgage interest deduction. The TCJA limited the mortgage deduction to interest on the first $750,000 of mortgage debt (rather than the pre-TCJA limit of $1 million) and eliminated the deduction for home equity debt unless the taxpayer used the debt to “buy, build, or substantially improve” the home securing the loan.
   • Other itemized deductions. The TCJA provisions eliminated several miscellaneous itemized deductions, including those for work expenses and tax preparation fees.
   • Limitation on itemized deductions. The TCJA removed the Pease limitation (a rule that reduced the value of itemized deductions at higher income thresholds).

During his campaign, President Trump proposed making these changes to itemized deductions except for the SALT cap. 

6. Alternative minimum tax (AMT) adjustments. Adjustments to AMT thresholds significantly reduced how many people dealt with this secondary tax. Extending these adjustments would keep AMT out of sight for most middle-income filers.
7. Section 199A pass-through deduction. A 20% deduction on qualified business income for certain pass-through entities is part of the TCJA’s appeal for many small business owners. Extending it would keep more money in business owners’ pockets.
8. Net operating loss (NOL) adjustments. The TCJA changed how taxpayers can carry losses over from year to year. Before the TCJA tax law, you could carry an NOL back to offset taxable income in the preceding two years or forward up to 20 years to offset future taxable income. Under the existing tax law, you can no longer carry losses back, but NOLs no longer expire after 20 years.
9. Higher estate tax exemption. The TCJA raised the lifetime estate and gift tax exemption from $5 million per person to $13.61 million per person (2024 limit). If this aspect of the Tax Cuts and Jobs Act expires, large estates could face higher estate taxes starting in 2026.

In addition, Trump has indicated he might restore certain business benefits, including 100% bonus depreciation (letting businesses immediately expense certain capital investments) and research and development (R&D) expensing—changes businesses certainly appreciated for their tax savings.

Potential new proposals on the table

The new administration has also discussed other tax tweaks, like exempting tips, Social Security, and overtime pay from income taxes, creating an itemized deduction for auto loan interest, and reviving the domestic production activities deduction, which would lower the effective corporate tax rate.

President Trump has promised to impose stiff new tariffs on imported goods to pay for these proposed tax cuts. If enacted, this would raise the existing tariffs on China to 60% and impose a universal tariff on all US imports of 20%.

What does this mean for you?

It’s tough to say what these changes to tax policy will mean for the average taxpayer because they aren’t actual laws yet. The impact of these proposed changes will depend on which combination of policies the administration pursues, how each policy is structured, and when they go into effect.

If the expiring provisions of the TCJA were allowed to expire, most Americans would see higher and more complicated taxes beginning in 2026. But there’s a good chance we will see some—if not all—of these provisions extended or made permanent before then.

The Tax Foundation estimates these proposals will boost after-tax income by an average of 2.2% by 2034. However, they also predict that the benefits would likely favor high-income households, while the impact of tariffs on imports could hit lower- and middle-income taxpayers harder.

As with any legislation, a lot is riding on what Congress eventually approves. While you might be able to continue enjoying the current structure, keep in mind that changes could happen at any time, especially as negotiations play out.

In the meantime, reach out to Countless for tax planning services. And continue reading this space for updates. Together, we can customize tax strategies for you and your business to help you look ahead and take steps to make the most of the current tax code.