How the TCJA Expiration Could Affect Your Taxes

The TCJA expiration is one of the most important upcoming events in the U.S. tax landscape. The Tax Cuts and Jobs Act of 2017 made sweeping changes—lower tax brackets, a larger standard deduction, and a more generous child tax credit. But unless Congress acts to extend the law, many of these provisions will sunset at the end of 2025. That means beginning in 2026, we may see higher tax rates, reduced deductions, and an overall increase in tax bills for many households. In this article, we’ll break down what the TCJA expiration could mean for your financial plan and how you can prepare now.

How the TCJA Expiration Could Impact Tax Brackets

One of the most noticeable changes under the TCJA was the lowering of income tax brackets. Here’s a basic breakdown of the 2025 tax brackets:

Tax Rate	Single Filers	Married Filing Jointly	Head of Household
10%	Up to $11,925	Up to $23,850	Up to $17,000
12%	$11,926 to $48,475	$23,851 to $96,950	$17,001 to $64,850
22%	$48,476 to $103,350	$96,951 to $206,700	$64,851 to $103,350
24%	$103,351 to $197,300	$206,701 to $394,600	$103,351 to $197,300
32%	$197,301 to $250,525	$394,601 to $501,050	$197,301 to $250,500
35%	$250,526 to $626,350	$501,051 to $751,600	$250,501 to $626,350
37%	Over $626,350	Over $751,600	Over $626,350

Under TCJA, for example, the 24% bracket for married couples filing jointly goes all the way up to $394,600. Before the TCJA, the 28% bracket topped out around $276,000 (inflation-adjusted). That means more income is taxed at lower rates under current law.

If the TCJA expires in 2026, the tax brackets will compress—meaning higher tax rates will apply to lower income levels. This will result in a higher tax bill even if your income doesn’t increase.

TCJA Expiration Would Lower The Standard Deduction

The TCJA nearly doubled the standard deduction, which simplified tax filing for many Americans. As of 2025, the updated standard deduction amounts are:

• Single Filers and Married Filing Separately: $15,000
• Married Filing Jointly: $30,000
• Head of Household: $22,500

There’s also an additional standard deduction for seniors and the blind:

• $2,000 extra for Single and Head of Household
• $1,600 extra per qualifying individual for Married Filing Jointly

Before the TCJA, the standard deduction for married couples was around $14,000. If the law sunsets, we’ll likely return to those pre-2018 levels, meaning more of your income could become taxable, especially if you don’t itemize deductions. This change would disproportionately affect middle-income taxpayers who rely on the standard deduction.

What TCJA Expiration Would Mean For Itemized Deductions:

TCJA also imposed limitations on several popular itemized deductions:

• State and Local Tax (SALT) Deduction: Capped at $10,000. This includes property taxes and state income taxes. For many taxpayers, especially in high-tax states, this cap reduced the value of itemizing.
• Mortgage Interest Deduction: Reduced from interest on up to $1 million in mortgage debt to $750,000. This primarily impacts higher-income homeowners.
• Itemized Deduction Phaseouts: Before the TCJA, high-income earners saw their itemized deductions phased out once their income passed a certain threshold. In 2017, that threshold was $261,000 for single filers and $313,000 for joint filers. Inflation-adjusted, those thresholds could be around $309,000 and $371,000 in 2026.

If these provisions return, higher-income households may see the tax benefit of their deductions reduced or eliminated entirely.

Personal Exemptions: Potentially Returning

Before 2018, taxpayers could claim a personal exemption for themselves, their spouse, and each dependent. This reduced taxable income for families, particularly larger ones.

The TCJA eliminated personal exemptions, but offset that loss with a higher standard deduction and an expanded child tax credit. If the TCJA expires, personal exemptions could return, although they may not fully offset the loss of the current standard deduction, depending on your household size.

Child Tax Credit: Will It Shrink Again?

The child tax credit was another area significantly impacted by the TCJA:

• The credit doubled from $1,000 to $2,000 per qualifying child under 17
• The income threshold to qualify was raised from:
  • $75,000 to $200,000 (single)
  • $110,000 to $400,000 (married filing jointly)

These changes made the credit available to many more middle-income families.

It’s also important to understand that a tax credit directly reduces the tax you owe, dollar-for-dollar, while a deduction reduces the amount of income that is subject to tax. This makes the child tax credit especially valuable.

If the TCJA expires, the credit amount may be cut in half, and the phase-out thresholds may revert to pre-2018 levels—meaning fewer families will qualify.

Who Really Benefited from the TCJA?

There’s a common narrative that the TCJA primarily benefited the wealthy. While high earners certainly saw tax savings, the proportional benefit was actually greater for many middle-class families.

For example:

• A household earning around $80,000 might have seen a 56% reduction in their tax liability
• A household earning $3.3 million saw only about a 7% reduction

This is because many of the TCJA’s provisions—lower brackets, higher standard deduction, child tax credit—provided more relative benefit to lower and middle-income taxpayers.

Final Thoughts

With the TCJA set to expire at the end of 2025, now is the time to start planning for what the tax landscape may look like in 2026 and beyond. Many of the changes discussed here could significantly increase your tax liability—regardless of your income level.

Understanding these upcoming shifts will help you make more informed decisions about income planning, retirement withdrawals, charitable giving, and more.

As always, consult a qualified financial planner or tax professional to explore how these potential changes may affect your unique situation.

Disclosure:

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. Money Evolution and LPL Financial do not offer tax advice or services.