On Wednesday January 1, 2026, nearly every American will be affected by a great number of tax changes, as the Trump tax cuts end on this date.

Major provisions in the Tax Cuts and Jobs Act of 2017 (TCJA) expire unless Congress extends them. If the TCJA provisions sunset, most everyone will be affected one way or another. Tax brackets, higher income tax rates for everyone, child tax credit, state and local tax deductions, mortgage interest deductions and much more will change.

If the provision is not renewed, the tax rates will revert to their 2017, pre-TCJA rates.

To pay less tax, you might consider taking advantage of the lower rates now by accelerating income into 2024 and 2025 if you can. For example, retirees may want to withdraw slightly more than their required minimum distribution (RMD) in these years. Or you may consider a Roth Conversion to save money by paying lower tax rates now rather than in 2026.

By the expiration of TCJA, the standard deduction will drop, personal exemptions resurface, and more people will itemize their taxes again. This means that the deductions become more valuable, and we will again have to keep our receipts for charitable contributions and other deductible items in order to claim them.

Per TCJA, you can deduct home mortgage interest only on the first $750,000 ($375,000 if married filing separately) of indebtedness. But if TCJA expires, the amount of mortgage interest you can deduct increases to $1 million ($500,000 if filing separately) of your mortgage. This can have a significant impact for the homeowners and the house hunters.

The expiration of TCJA also means that most of us will see higher tax withholding. Per TCJA the personal exemption for each dependent under age 17 was eliminated. It doubled the child tax credit to $2,000 per person, with a $1,700 refundable portion in 2024 phased in starting at $2,500 in earned income.

If TCJA is not extended, the child tax credit will revert back to $1,000 per child aged 16 years and under. It would be refundable and phased in starting at $3,000 of earned income.

Work requirements would remain, but low-income families who don't pay income taxes would get up to $1,800 refunded of the $2,000 per-child credit instead of the current $1,600. The amount would rise to $1,900 in 2024 and $2,000 in 2025.

Under TCJA, W-2 employees were no longer allowed to deduct job-related expenses that the company didn't reimburse. By the expiration of TCJA, this provision will return, which could benefit millions of us who work some portion of our work week at home. The rules, which would return, will again allow W-2 workers to take tax deductions for a wide range of unreimbursed work-related expenses including mileage, home office supplies, union dues, uniforms, internet, telephone, magazine subscriptions, and meals.

The expiration of TCJA will also bring back the Moving Expense deduction. Under TCJA only the members of the military were qualified for the deduction and if your employer paid for your relocation, it would be considered taxable income.

Under TCJA the state and local taxes (SALT), were limited to $10,000. By the expiration of TCJA the cap will be eliminated and individuals in states like California will enjoy a higher deduction of their SALT. This means that the government deficit will become even larger.