The Tax Cuts and Jobs Act provisions expire on December 31, 2025
Most of the tax cuts passed in the Tax Cuts and Jobs Act of 2017 are set to end on December 31, 2025, unless Congress extends them. This affects individual income tax rates, the standard deduction, child tax credits, and dozens of other deductions and credits that have been in place for the past eight years. If no action is taken, your tax bill will likely increase in 2026 because these provisions will revert to the rates and rules that existed before 2018.
The expiration is not automatic cancellation — it is a scheduled sunset. Congress can and has extended these provisions before. However, you should understand what changes now so you can plan ahead and know what to expect on your 2025 return and beyond.
Key Takeaways
- Individual income tax rates drop back to pre-2018 levels on January 1, 2026, meaning most taxpayers will owe more federal tax starting with their 2026 return.
- The standard deduction will decrease significantly — for example, the 2025 standard deduction for single filers is $14,600, but it would fall to roughly $13,000 without extension.
- The Child Tax Credit drops from $2,000 per child to $1,000 per child, and the credit becomes less refundable.
- Many business deductions and credits also expire, including the pass-through deduction that benefits self-employed people and small business owners.
- Congress may extend these provisions, but that decision has not yet been made and will likely happen late in 2025.
Which tax rates and deductions expire
The 2017 law changed individual income tax brackets and rates. Under current law, there are seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Starting January 1, 2026, those rates revert to the pre-2018 brackets: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The exact dollar amounts where each bracket begins also change, which means your taxable income will be taxed at a higher rate even if your income stays the same.
The standard deduction — the amount you can deduct without itemizing — also expires. For 2025, the standard deduction is $14,600 for single filers and $29,200 for married filing jointly. Without extension, these amounts would drop to approximately $13,000 and $26,000 respectively (adjusted for inflation from 2017 levels). This means more of your income becomes taxable.
The deduction for may have access to business income, often called the pass-through deduction, also sunsets. This allows self-employed people, partners, and S-corporation owners to deduct up to 20% of their business income. If it expires, that deduction disappears entirely.
Child and dependent tax credits that change
The Child Tax Credit is currently $2,000 per may have access to child under age 17. Starting in 2026, it drops to $1,000 per child. The credit also becomes less refundable — meaning fewer families will receive the full amount as a refund if they owe no federal tax.
The credit for other dependents (such as adult children, parents, or siblings you support) also changes. Currently it is $500 per dependent. Under the pre-2018 rules, there was no separate credit for non-child dependents, though some taxpayers could claim a personal exemption instead.
These changes affect families with children most directly. A family with three children could see their tax credit drop by $3,000, which translates to a higher tax bill or smaller refund.
Education credits and student loan deductions
The American Opportunity Tax Credit remains permanent and does not expire in 2025. However, other education-related provisions do change. The deduction for student loan interest is currently capped at $2,500 per year. This deduction does not expire, but other education incentives tied to the 2017 law do.
The Lifetime Learning Credit and American Opportunity Credit themselves are permanent, but the income limits and phase-out ranges that explore to them were adjusted by the 2017 law. Some of those adjustments may shift depending on whether Congress acts.
Business deductions and depreciation rules
The 2017 law allowed businesses to deduct the full cost of certain equipment and property in the year it was purchased, rather than depreciating it over several years. This is called bonus depreciation. The law phases this out gradually: in 2023 it was 80%, in 2024 it was 60%, in 2025 it is 40%, and in 2026 it would be 20%. After 2026, bonus depreciation expires entirely unless extended.
Section 179 expensing, which allows small businesses to deduct the cost of equipment when ready, also has limits that change. The current limit is $1,160,000 for 2025. Without extension, this limit would drop to approximately $500,000 in 2026.
These changes affect business owners and self-employed people most directly, as they reduce the deductions available when purchasing equipment, vehicles, or other business property.
What happens if Congress does not extend these provisions
If Congress takes no action, the expiration is automatic. Your 2026 tax return will be filed under the old rules — higher tax rates, lower standard deduction, lower child tax credits. The IRS will not send you a notice; the change will straightforward be built into the tax forms and software you use.
Congress has extended these provisions once before, in 2020, and has discussed extension multiple times. However, extension requires a vote and is not may provide. Historically, Congress has waited until late in the year to make these decisions, sometimes even after the year has ended.
If you are self-employed or own a business, you may want to discuss timing of income and deductions with a tax professional before year-end 2025, in case you need to adjust your strategy based on what Congress does.
How to prepare for potential tax changes in 2026
Start by understanding your current tax situation. If you received a large refund in 2024 or 2025, you may owe more in 2026 if rates and deductions change. If you have children, the drop in the Child Tax Credit will directly affect your refund or bill.
If you are self-employed or own a business, review your use of the pass-through deduction and bonus depreciation. Consider whether you might want to accelerate equipment purchases into 2025 if bonus depreciation is higher now than it will be in 2026.
Watch for news from Congress in late 2025. If extension is passed, you will have certainty. If it is not, you will have time to adjust your 2026 withholding or estimated tax payments before the year begins. You can also contact a tax professional to model what your 2026 return might look like under both scenarios.
Frequently Asked Questions
Will my tax refund be smaller in 2026?
Possibly. If the tax cuts expire, your tax liability will increase because of higher rates and lower deductions. This means you will owe more tax overall. Whether your refund is smaller depends on how much you have withheld from paychecks or paid in estimated taxes. If you do not adjust your withholding, your refund could shrink or turn into a bill.
Does the expiration affect my 2025 tax return?
No. Your 2025 return uses the current rules — the tax rates, standard deduction, and credits that are in place now. The expiration takes effect on January 1, 2026, so it affects returns filed in 2027 for the 2026 tax year.
Can Congress extend these provisions again?
Yes. Congress can vote to extend the provisions at any time, including after December 31, 2025. However, extension is not automatic and requires a separate vote. Congress has extended them before but has not yet announced whether it will do so for 2026 and beyond.
How much more will I owe if the cuts expire?
The amount varies based on your income, filing status, and number of dependents. A single person earning $50,000 might owe a few hundred dollars more. A family with three children could see a much larger increase because of the drop in the Child Tax Credit alone. Use a tax calculator or speak with a tax professional to estimate your specific situation.
Should I change my withholding now?
Not yet. Wait to see what Congress does in late 2025. If the provisions are extended, no change is needed. If they expire, you can adjust your withholding for 2026 by submitting a new Form W-4 to your employer before the year ends.