Will the 2017 Tax Cuts Stay? Here’s What an Extension Could Mean for You

The Tax Cuts and Jobs Act (TCJA), signed into law in 2017, brought sweeping changes to the U.S. tax code. From reducing individual and corporate tax rates to expanding deductions and credits, it reshaped how both individuals and businesses approached their taxes. But here’s the catch — many of those provisions are set to expire at the end of 2025.

That looming deadline has sparked debate across political and financial circles: Should these provisions be extended? And if so, what would that mean for your wallet, your business, and the broader economy?

Let’s break down what an extension of the TCJA could look like, and what you should start planning for now.

What it means for individuals

One of the TCJA’s most noticeable impacts was the reduction in individual income tax rates. The top marginal rate dropped from 39.6% to 37%, with cuts across almost all brackets. Unless Congress acts, these lower rates will disappear in 2026, reverting to pre-2018 levels.

For middle-income families, that could mean an abrupt jump in their annual tax bill. Households earning under $100,000 saw an average tax cut of 16% due to a combination of lower tax rates, a higher standard deduction, and a Child Tax Credit. If these provisions expire, many families in this income range could face a noticeable increase in their tax burden.

Another key change was the doubling of the standard deduction. For the 2025 tax year, it stands at $15,000 for single filers and $30,000 for married couples filing jointly. This simplified tax filing for millions, reducing taxable income and eliminating the need for itemizing. But if the TCJA expires, 91% of taxpayers will see their standard deduction cut in half, potentially raising their tax liability.

Families also benefited from an expanded Child Tax Credit, which increased from $1,000 to $2,000 per child and became accessible to more households. Without legislative action, this credit would shrink significantly, raising the tax burden on working families.

For high-net-worth individuals, the lifetime estate exclusion increased to $13.99 million in 2025 as compared to $5.49 million back in 2017. That too is temporary — and unless extended, the threshold would return to an estimated $7 million, increasing estate tax exposure for wealthy families.

What it means for businesses

The corporate tax rate was permanently reduced from 35% to 21% — a major win for corporations. But not all business-friendly provisions were permanent. Two that are set to expire without action include:

20% pass-through deduction (Section 199A): This provision allows eligible owners of pass-through businesses — such as S corporations, partnerships, and sole proprietorships — to deduct up to 20% of their qualified business income (QBI) on their individual tax returns.

Since pass-through entities themselves don’t pay income tax, the benefit directly reduces the owner’s taxable income. If the deduction expires, high-earning individuals with pass-through income could face a top marginal rate of 39.6%, increasing their effective tax burden significantly.

Full expensing of capital investments: One of the most impactful business provisions of the TCJA was allowing companies to immediately deduct 100% of the cost of qualifying capital investments, such as equipment and machinery.

However, that full expensing began phasing out in 2023 and will drop to 40% in 2025. Without an extension or legislative change, bonus depreciation is scheduled to phase out entirely by 2027. The reduced deduction could discourage businesses from making large-scale investments, potentially slowing growth and innovation.

Planning ahead: What taxpayers should do now

If you’re an individual taxpayer, now is the time to maximize current benefits — claim the higher standard deduction, utilize the expanded child credit, and consider estate planning strategies before exemption levels drop.

Business owners should accelerate planned investments to take advantage of full expensing while it’s available. It’s also a smart time to evaluate your entity structure — whether a C-corporation or pass-through entity makes more sense under today’s rules and in the context of future changes.

Big picture: What’s at stake?

Extending the TCJA could sustain economic growth by supporting consumer spending and business investment. After the TCJA passed in 2017, GDP growth outpaced projections by roughly 1% annually. However, it’s not without cost — the estimated price tag to extend the individual and business provisions is $4.2 trillion over the next decade.

As policymakers weigh the pros and cons, taxpayers should focus on what they can control: leveraging current tax advantages and planning for a potentially different landscape in 2026.

Not sure how the changes might affect you or your business? Now’s the time to speak with a tax advisor and take a proactive approach to protect your bottom line.