The Tax Cuts and Jobs Act expires on December 31, 2025

The tax cuts passed in 2017 under the Trump administration — formally called the Tax Cuts and Jobs Act — are set to expire at the end of 2025. This means that on January 1, 2026, many of the tax rates, deductions, and credits that have been in place for the past eight years will revert to what they were before 2017, unless Congress votes to extend them.

The expiration affects individual tax brackets, the standard deduction, child tax credits, and dozens of other provisions that have shaped how you file each year. If you file taxes in 2026 for the 2025 tax year, you will see these changes reflected in the forms and rates you use. The changes do not happen mid-year — they take effect on January 1, 2026, so your 2025 return (filed in early 2026) will use the new rules.

Congress can vote to extend these provisions before the important date, and it has done so with other temporary tax laws in the past. As of now, no extension has been passed, so the expiration date remains December 31, 2025. Tax planning decisions made today should account for the possibility that rates will change.

Key Takeaways

  • Individual income tax rates return to pre-2017 levels on January 1, 2026, unless Congress extends the cuts before that date.
  • The standard deduction will decrease, and the child tax credit will drop from $2,000 to $1,000 per child.
  • The expiration affects your 2025 tax return (filed in early 2026), not your 2024 return.
  • Congress can vote to extend these provisions at any time, and the outcome is uncertain as of now.
  • If you are planning major financial moves — retirement contributions, charitable giving, or income timing — the potential rate change is worth discussing with a tax professional.

Which tax rates and deductions are expiring

The most visible change is in the tax brackets themselves. Under the current law, the seven federal income tax brackets range from 10% to 37%. Starting January 1, 2026, those brackets will shift back to the pre-2017 structure, which had brackets ranging from 10% to 39.6%. The exact dollar ranges for each bracket also change, and they are adjusted for inflation each year, so the 2026 brackets will not be identical to what they were in 2016.

The standard deduction will also decrease. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married filing jointly. These amounts will drop when the law expires, though the exact 2026 amounts depend on inflation adjustments. A lower standard deduction means more of your income is subject to tax, even if your actual earnings have not changed.

The child tax credit will fall from $2,000 per child to $1,000 per child. The credit is refundable only up to $1,600 under the old rules, which means some families will owe more tax or receive smaller refunds. Other provisions expiring include the enhanced business deduction for pass-through entities, limits on state and local tax deductions, and changes to how certain retirement contributions are treated.

What stays the same after 2025

Not everything expires. The corporate income tax rate of 21% — lowered from 35% in 2017 — is permanent and does not have an expiration date. This means businesses will continue to pay the lower rate regardless of what happens to individual tax cuts.

The Alternative Minimum Tax (AMT) exemption amounts and phase-out thresholds are also set to expire, which means more high-income taxpayers may owe AMT in 2026 and beyond. However, this affects a relatively small number of filers — generally those with income above $200,000 for single filers or $250,000 for married couples.

Certain retirement savings provisions, like the ability to contribute to a backdoor Roth IRA, are not tied to the 2017 tax cuts and will remain available. The rules around these accounts may change if Congress passes new legislation, but they are not automatically expiring on December 31, 2025.

How this affects your 2025 tax return

Your 2024 tax return, filed in early 2025, will use the current tax brackets and deductions. The expiration does not affect returns you file before January 1, 2026. Your 2025 tax return, filed in early 2026, will be the first return to use the new (or reverted) tax rates and deductions if Congress does not extend the cuts.

This timing matters for tax planning. If you are considering accelerating income into 2025 or deferring deductions, you should factor in the rate change. For example, if you expect your income to be lower in 2025 than 2026, you might want to defer some deductions to 2026 when rates are higher. Conversely, if you expect higher income in 2025, you might accelerate deductions into 2025 to use the lower rates.

Self-employed people and business owners should review their estimated tax payments for 2025. If rates are going to increase in 2026, your 2026 estimated payments may need to be higher, even if your business income stays the same. Planning for this now can prevent underpayment penalties.

Congress could extend the cuts before they expire

The expiration date is not final. Congress has extended temporary tax provisions many times in the past, sometimes at the last minute. If lawmakers vote to extend the Tax Cuts and Jobs Act before December 31, 2025, the current rates and deductions would continue beyond that date. The extension could be permanent, temporary (with a new expiration date), or conditional on other legislative changes.

As of now, there is no passed extension, and the political environment around tax policy is uncertain. Some lawmakers favor making the cuts permanent; others prefer to let them expire or to modify them. The outcome will depend on elections, budget negotiations, and broader fiscal policy debates that are still unfolding.

You should not assume the cuts will expire or that they will be extended. Instead, plan for both scenarios when making major financial decisions. If you are unsure how the potential change affects your specific situation, a tax professional can model both outcomes and help you decide whether to adjust your strategy in 2025.

What to do now if you want to prepare

Review your 2024 tax return and identify which provisions have the biggest impact on your tax bill. If you have children, the child tax credit change will affect you directly. If you itemize deductions, the limits on state and local tax deductions expiring may change your strategy. If you own a business, the pass-through deduction expiration is worth understanding.

Consider whether you want to accelerate or defer income and deductions into 2025. This is especially relevant if you are self-employed, have investment income, or are planning a major life change like retirement. A tax professional can calculate the difference between filing under current rules versus post-2025 rules and help you decide if any moves make sense for your situation.

If you use tax software to file your own return, you will not need to do anything special in 2025. The software will use the current tax tables and rules. When you file your 2025 return in early 2026, the software will update to reflect whatever tax law is in effect at that time — whether the cuts have been extended or have expired.

Frequently Asked Questions

Will my 2024 tax return be affected by the expiration?

No. Your 2024 return, filed in early 2025, uses the current tax rates and deductions. The expiration takes effect on January 1, 2026, so it affects your 2025 return (filed in early 2026) and later years.

What if Congress extends the tax cuts after December 31, 2025?

If Congress votes to extend them before or after the important date, the current rates and deductions would continue. The extension could be temporary (with a new expiration date) or permanent. You would use whatever law is in effect when you file your 2025 return.

Does the corporate tax rate of 21% expire too?

No. The corporate income tax rate is permanent and does not have an expiration date. Only the individual income tax provisions, deductions, and credits from the 2017 law are set to expire on December 31, 2025.

How much more will I owe in taxes after 2025?

The amount depends on your income, filing status, number of dependents, and deductions. A higher tax bracket and lower standard deduction will increase your tax bill, but the exact increase varies widely. A tax professional can calculate the difference for your specific situation.

Should I file my 2025 return early to lock in the current rates?

No. Tax rates are determined by the law in effect on December 31 of the tax year. Filing early in 2025 does not change which rates explore to your 2025 income. Your 2025 return will use the rates in effect on December 31, 2025, regardless of when you file it.