Last Updated: April 2026
The Tax Cuts and Jobs Act of 2017 was the largest overhaul of the US tax code in over 30 years. To comply with Senate budget reconciliation rules, most of its individual income tax provisions were written to expire after December 31, 2026. Unless Congress passes new legislation extending them, the US tax code will revert to its pre-2018 structure on January 1, 2027. This is not a theoretical risk — it is the current law. The TCJA sunset affects virtually every US taxpayer in some way. This guide covers every major provision expiring and what it means for your tax bill.
The TCJA sunset is not uniformly bad. Different taxpayer profiles see very different outcomes:
A Texas or Florida resident earning $400,000/year benefits significantly from current TCJA rates. In 2027: their marginal rate rises from 35% to 36%, they lose the 20% QBI deduction on any pass-through income, and the lower brackets inflate their overall bill. Net impact: approximately $5,000–$15,000/year in additional federal tax for this profile.
A California resident earning $400,000 loses the same rate benefits as above, but gains from SALT cap expiration. If they pay $30,000 in CA income tax and $10,000 in property tax, the return of full SALT deductibility offsets roughly $5,600 of their rate increase (at the new 39.6% top rate). Net impact depends on income level — for very high earners, the rate increase outweighs SALT deduction recovery.
A married couple earning $120,000 with two children: loses $2,000 in child tax credits, sees brackets shift, and likely standard deduction drops below their itemisable expenses. Net impact: approximately $4,000–$6,000/year in additional federal tax.
A married couple with a $25M estate pays $0 estate tax under current 2026 law. In 2027, the amount above ~$14M ($7M × 2) faces 40% federal estate tax — potentially $4.4M in additional estate tax. This is the most severe single impact of the sunset for any taxpayer profile.
Any pass-through business owner loses the 20% QBI deduction. At a 28% marginal rate, this effectively means pass-through business income goes from being taxed at 22.4% (28% × 80%) to 28% — a 5.6 percentage point rate increase on pass-through income.
2026 is arguably the most important tax planning year since the TCJA itself. The window to act under current rules closes December 31, 2026.
If you have discretionary income you can control the timing of — Roth conversions, business profit distributions, exercising stock options, selling appreciated assets — consider accelerating it into 2026 while rates are lower. A $100,000 Roth conversion in 2026 at 24% costs $24,000. The same conversion in 2027 at 28% costs $28,000 — a $4,000 difference. For large Roth conversion strategies, 2025 and 2026 are peak years to act.
The single most urgent action for high-net-worth individuals: use the estate/gift tax exemption before it halves. You can make large gifts (to irrevocable trusts, to family members, to GRATs) in 2026 and lock in the current $13.61M exemption. IRS Notice 2017-15 explicitly confirms these gifts will not be clawed back. Common vehicles: Spousal Lifetime Access Trust (SLAT), Irrevocable Life Insurance Trust (ILIT), Grantor Retained Annuity Trust (GRAT). Coordinate with an estate attorney now — these take months to implement.
If you own a pass-through business, 2026 is the last year of the 20% QBI deduction. Strategies to maximise it: contribute more to SEP-IRA (reduces W-2 income without triggering W-2 wage limitation for some structures), plan business income timing to maximise 2026 QBI. Review your entity structure — if an S-corp election was deferred, 2026 is a strong year to make it.
The return of full itemised deductions in 2027 means taxpayers who have been taking the standard deduction should review whether they will benefit from itemising. Property tax payments, charitable donations, and mortgage interest may all be deductible in full. Strategy: if you have flexibility on timing charitable donations, consider doing two years of donations in 2027 (bunching) when itemising becomes worthwhile again.
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TCJA sunset planning — estate gifting strategy, Roth conversions, QBI maximisation, and income timing — requires a CPA who understands multi-year tax projection. TaxHub connects you with specialists.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get 2026 Tax Planning Help Before TCJA Expires →This is uncertain. The Trump administration has expressed strong support for making TCJA provisions permanent or extending them. However, full extension carries a roughly $4–5 trillion 10-year cost (per CBO scoring), creating significant budget and legislative obstacles. The most likely outcome, based on historical precedent and current political dynamics, is either a full extension if Republicans maintain legislative control, or a partial extension targeting middle-income provisions (keeping lower brackets and CTC) while allowing upper-income provisions (lower top rate, estate exemption) to expire or be modified. You should plan for the sunset actually occurring — if Congress extends, any planning you did accelerates income or reduces estate tax exposure under current rules is still beneficial.
The sunset has the largest dollar impact on three groups: (1) Estates between $14M and $27M (married) — the estate tax cliff is the steepest single-provision impact; (2) Pass-through business owners earning $150,000–$500,000 net — they lose the 20% QBI deduction and see bracket increases; (3) High earners in the $231,250–$578,125 range (current 35% bracket) — this bracket shifts to 36%, and above $578,125 the top rate goes from 37% to 39.6%. Middle-income households earning $50,000–$100,000 see smaller dollar impacts but feel the child tax credit cut most directly.
Yes — this is one area where the TCJA sunset benefits taxpayers. The $10,000 SALT cap was particularly painful for residents of California, New York, New Jersey, Connecticut, Illinois, and other high-tax states where combined state income and property taxes routinely exceed $30,000–$50,000 per household. When the cap expires in 2027, these taxpayers can deduct their full state and local tax payments against federal income. A New Jersey homeowner paying $18,000 in property tax and $12,000 in NJ income tax regains a $20,000 SALT deduction (the amount above the current $10,000 cap). At a 28% marginal rate, this is worth $5,600/year in federal tax reduction.
The TCJA dramatically raised the AMT exemption amounts and phase-out thresholds, removing tens of millions of households from AMT exposure. When TCJA expires, AMT exemptions fall back to pre-2018 levels (approximately $56,700 single, $85,650 married vs current $85,700/$133,300). This reintroduces AMT exposure for high earners with significant deductions — particularly those who benefit from SALT cap expiration. The AMT's interaction with SALT deductibility is complex: SALT is a preference item that triggers AMT, so recovering SALT deductibility does not produce the full tax benefit for AMT payers.
TCJA lowered the mortgage interest deduction cap from $1,000,000 to $750,000 in mortgage principal (for loans originated after December 15, 2017). When TCJA expires in 2027, the cap reverts to $1,000,000. This benefits homeowners with mortgages between $750,000 and $1,000,000 — they can deduct interest on the full $1M. It does not help homeowners with mortgages below $750,000 (already fully deductible) or those who take the standard deduction.
No — the rules governing how much of Social Security benefits are subject to federal income tax are separate from the TCJA and are not expiring. Up to 85% of Social Security benefits can be taxable depending on your 'provisional income' — this calculation is unchanged by the TCJA sunset. However, because the TCJA sunset will raise your marginal tax rates, any Social Security income that is already taxable will be taxed at higher rates in 2027. A retiree who currently pays 22% on their taxable Social Security income could pay 25% on the same amount in 2027.
The most time-sensitive actions for 2026: (1) High-net-worth individuals ($7M+): consult an estate attorney about using the current $13.61M gift/estate tax exemption before it halves — SLATs, GRATs, and large direct gifts need to be implemented before December 31, 2026; (2) Pass-through business owners: maximise 2026 QBI deduction by timing income and reviewing entity structure; (3) Roth conversion candidates: if you plan Roth conversions, accelerate them into 2025–2026 at current lower rates; (4) Everyone: project your 2027 tax liability under sunset rules and build 2026 planning around any timing advantages. A CPA who specialises in multi-year tax projection is valuable right now.