The clock is ticking on one of the most significant tax overhauls in recent history—the 2017 Tax Cuts and Jobs Act (TCJA). Unless Congress acts, many of its tax provisions will expire on December 31, 2025. This includes lower marginal tax rates, a doubled standard deduction, the 20% Qualified Business Income (QBI) deduction for pass-throughs, and a generous estate tax exemption. The expiration will usher in what some are calling a “tax cliff,” with broad implications for families, entrepreneurs, and high-net-worth individuals.
If the sunsets proceed as scheduled, tax brackets will shift back to their pre-2017 levels. The standard deduction for married couples will fall from around $27,700 to $13,850, effectively increasing taxable income for most households. The Child Tax Credit will shrink, and the SALT deduction cap will likely return to its previous, more restrictive limit. For small business owners operating as LLCs, S corporations, or sole proprietors, the loss of the 20% QBI deduction could result in a meaningful increase in federal income tax liabilities.
From a taxpayer’s perspective, the stakes are high. Supporters of the sunset argue that it’s a return to fiscal responsibility, particularly in an environment of soaring national debt. They claim that the TCJA’s benefits heavily favored the wealthy and did little to improve income equality or long-term growth. On the other hand, opponents argue that allowing these provisions to lapse will disproportionately harm middle-income earners and small business owners, particularly in light of persistent inflation, the resumption of student loan repayments, and ongoing challenges to housing affordability.
The takeaway? Don’t wait until December 2025 to react. Individuals should evaluate their withholding and deductions now, while business owners should explore options for restructuring, accelerating deductions, or transitioning to tax-advantaged vehicles. Estate plans, especially for those with substantial assets, should be reviewed promptly to take advantage of the higher exemption. In short, proactive tax planning is no longer optional—it’s essential. Because when the sun sets on the TCJA, your financial horizon may look very different.