When the TCJA passed in late 2017, it introduced sweeping tax reforms. Many corporate changes were made permanent. However, most individual and pass-through business provisions were temporary.

Unless extended, those provisions will sunset on January 1, 2026.

Here’s what that means in practical terms.

1. Individual Tax Rates Are Scheduled to Increase

Under current law, individual income tax rates range from 10% to 37%.

Beginning in 2026, rates are scheduled to revert to the pre-TCJA structure, with brackets ranging from 10% to 39.6%, and several middle brackets increasing by approximately 3% to 4%.

For many taxpayers, this means a higher marginal tax rate — even if income remains the same.

Higher marginal rates affect:

• Wage income
• Self-employment income
• Capital gains strategies
• Roth conversion decisions
• Timing of bonuses or business income

Planning during 2024 and 2025 may allow you to take advantage of today’s lower rates before they revert.

2. The Standard Deduction Is Scheduled to Decrease

One of the most visible TCJA changes was the near doubling of the standard deduction.

Beginning in 2026, the standard deduction is scheduled to revert to pre-2018 levels, adjusted for inflation.

At the same time, personal exemptions — eliminated under the TCJA — are scheduled to return.

For larger families, this may partially offset the reduced standard deduction. For single filers or households without dependents, taxable income may increase.

The practical impact?

Many taxpayers who currently rely on the standard deduction may need to revisit itemizing deductions beginning in 2026.

That includes tracking:

• Mortgage interest
• Charitable contributions
• Medical expenses
• State and local taxes

Proactive recordkeeping will become more important again.

3. The Child Tax Credit Is Scheduled to Shrink

The expanded Child Tax Credit introduced under the TCJA is also scheduled to revert to its prior structure.

Unless extended, the credit amount will decrease and phaseout thresholds will return to lower levels.

For families with children, this could result in a noticeable reduction in tax credits starting in 2026.

Planning ahead may help soften the impact.

4. The SALT Deduction Cap Is Scheduled to Expire

Currently, the deduction for state and local taxes (SALT) is capped at $10,000.

In 2026, that cap is scheduled to be removed.

For taxpayers in high-tax states, this may provide relief — but only if they itemize deductions.

This change interacts directly with the reduced standard deduction, which is why tax modeling in advance is essential.

5. Qualified Business Income (QBI) Deduction Is Scheduled to Expire

For pass-through businesses — including sole proprietors, LLCs, and S-Corporations — the 20% Qualified Business Income (Section 199A) deduction is scheduled to expire after 2025.

If that happens, many small business owners will see their effective tax rate increase.

This makes entity structure, compensation planning, and income timing strategies especially important in the next two years.

6. Bonus Depreciation Continues to Phase Down

Bonus depreciation is already phasing down under current law and is scheduled to decline further by 2026.

For businesses planning significant equipment or capital investments, timing may matter.

Accelerating purchases into earlier tax years could provide stronger deductions under current rules.

7. Estate and Gift Tax Exemption Is Scheduled to Be Reduced

The federal estate and gift tax exemption is currently at historically high levels.

In 2026, it is scheduled to be reduced by roughly half (adjusted for inflation), unless Congress intervenes.

For high-net-worth families, this change may significantly affect estate planning strategies.

Advanced planning — including gifting strategies and trust structures — may become more urgent before 2026.

Strategic Planning Before 2026

The advantage we have right now is visibility.

We know what is scheduled to change. That creates opportunity.

Here are several strategies worth evaluating with a CPA:

Roth Conversions

If you expect to be in a higher tax bracket in 2026 or beyond, converting traditional retirement funds to Roth accounts while rates are lower may be beneficial.

Income Acceleration

Business owners may consider accelerating income into 2024 or 2025 while rates are lower.

Deduction Timing

Deferring deductions into higher-rate years may increase their value.

Capital Gains Planning

Strategic gain harvesting before rates increase could reduce long-term tax exposure.

Estate Planning Adjustments

Families with significant assets may want to review gifting and trust strategies before exemption levels potentially decline.

Every strategy must be evaluated individually. There is no one-size-fits-all solution.

Why Waiting Could Be Costly

Many taxpayers assume Congress will “fix it” before 2026.

Perhaps they will.

But tax planning based on political assumptions is risky.

The safest position is to prepare under current law — and adjust later if legislation changes.

Because once 2026 arrives, retroactive planning options disappear.

Final Thoughts

2026 represents more than a new tax year.

It marks the scheduled expiration of some of the most impactful tax provisions of the past decade.

For individuals, families, retirees, and business owners, the next two years provide a window to:

• Reevaluate tax positioning
• Model future bracket exposure
• Optimize retirement decisions
• Structure income intelligently
• Strengthen estate plans

The goal is not to panic.

The goal is to prepare.

If you would like to evaluate how these scheduled changes may affect your personal or business tax situation, now is the time to begin that conversation.