On December 31, 2025, almost all Americans are going to experience a hurricane of tax changes, according to tax professionals, the main provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) are going to expire, unless Congress extends them, if the provisions of the TCJA expire, almost everyone will have effects in one way or another, they said.
Tax brackets, income tax rates, the child tax credit, state and local tax deductions, mortgage interest deductions and much more will have a radical change overnight, the potential changes seem not to be very close, but tax experts say that people need to be vigilant and consider measures from now on to ensure that they do not face a series of tax surprises.
“In less than 18 months, the Super Bowl of tax law changes will happen,” said Mark Steber, director of tax information at tax preparation company Jackson Hewitt. Variations in deductions and credits are going to affect people differently, but Steber said that “tax rates will be higher for everyone. That is indisputable””
2026 Tax Update — Higher Rates and New Brackets Await
The TCJA, which was initiated by President Donald Trump, minimized tax rates in general and made changes to the thresholds for various income tax brackets, certain people went through a larger reduction than others, but practically everyone gained at least a little, tax experts commented.
For example, a married couple who have total income, minus deductions, of $250,000, would have had a tax rate of 33% in 2017, but only 24% in 2024, a person earning $39,000 in taxable income in 2017 would have had a top tax rate of 25%, but only 12% in 2024, for those people in the highest tax bracket, the rate was reduced from 39.6% to 37%, if the provision is not renewed, the tax rates will return to the 2017 rates, prior to the TCJA.
Hurry Up — Taxes Will Raise Next Year
To pay a little less taxes, U.S. citizens might consider taking advantage of today’s lower rates and advancing income to 2024 and 2025, if they can, for example, “Retirees might want to withdraw a little more than their required minimum distribution in these years,” said Nayan Lapsiwala, director of wealth management at Aspiriant, “Others may consider a Roth conversion to save money by paying lower tax rates now and no taxes when they withdraw later from Roth accounts.”
Also, “you should reconsider the timing of deductions if you anticipate your tax rate will be higher,” said Evan Morgan, director of tax advisory services at the professional services firm Kaufman Rossin. “Defer deductions such as charitable contributions and retirement contributions to reduce your income starting in 2026.”
Higher Rates and Less Deductions in 2026
The standard deduction, which minimizes a person’s taxable income, was essentially doubled with former President Trump’s tax cuts, allowing many more people to use it instead of itemizing their taxes.
In the 2020 tax year, about 90% of taxpayers filed for the standard deduction, up from about 70% in 2017, according to the left-leaning think tank Tax Policy Center.
