If you've been glancing at your paycheck or planning your family's budget for the next few years, you’ve probably heard the murmurs about a "tax cliff." It sounds scary. For a long time, the big question was: when do trump tax cuts expire? People were genuinely worried that 2026 would bring a massive, across-the-board tax hike that would gut the middle class.
Well, things just changed. Big time.
The original script for the Tax Cuts and Jobs Act (TCJA) of 2017 was basically a ticking time bomb. Most of the juicy stuff for individuals—like the lower tax rates and the doubled standard deduction—was legally required to vanish at the stroke of midnight on December 31, 2025. But with the passage of the One Big Beautiful Bill Act (OBBBA) in July 2025, that expiration date was largely erased.
Basically, if you were bracing for your tax rates to jump back up to those old 2017 levels next year, you can breathe a little easier. Most of those "temporary" cuts are now the law of the land permanently.
The 2026 Reality: What’s Staying and What’s Going
It’s easy to get lost in the jargon, but here’s the gist. The OBBBA essentially took the "expiring" parts of the Trump tax cuts and gave them a permanent home in the tax code. We aren't going back to the old 10%, 15%, 25% brackets.
Instead, for the 2026 tax year, we’re keeping the seven-bracket structure we’ve grown used to: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
Honestly, the most interesting part isn't just that they stayed; it's that they’re being adjusted for inflation quite aggressively. For 2026, the IRS is bumping the thresholds up by about 2.7% on average. But the bottom two brackets—the 10% and 12% ones—got a special 4% "boost" thanks to the new law. This means you can earn a bit more before you get pushed into a higher tax percentage.
The Standard Deduction is Safe
This was the big one. If the TCJA had expired as originally planned, the standard deduction would have been sliced in half. That would have forced millions of people back into the nightmare of itemizing their receipts just to save a few bucks.
Under the new 2026 rules:
- Married Couples Filing Jointly: Your standard deduction climbs to $32,200.
- Single Filers: You’re looking at $16,100.
- Heads of Household: This jumps to $24,150.
These numbers are actually higher than they were in 2025. It’s a permanent fixture now.
The SALT Cap Drama Just Got a Sequel
If you live in a high-tax state like New York, New Jersey, or California, you’ve probably spent the last several years complaining about the $10,000 cap on State and Local Tax (SALT) deductions. It was one of the most hated parts of the 2017 bill.
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The 2025 legislation pulled a bit of a "gotcha" here. They raised the cap—significantly—but only for some people, and only for a little while.
For 2026, the SALT deduction cap is now **$40,000 for married couples** ($20,000 for singles). That’s a massive relief if you have high property taxes. But there's a catch. This higher cap starts phasing out if your income (MAGI) is over $500,000. And the real kicker? This "new and improved" cap is currently set to shrink back down to $10,000 in 2030.
So, while we solved the immediate question of when do trump tax cuts expire, we actually just created a new deadline for the SALT deduction a few years down the road.
Small Business Owners and the QBI Deduction
If you run a pass-through business (like an S-corp or an LLC), the Section 199A deduction—which lets you take 20% off your qualified business income—was also on the chopping block for 2026.
The OBBBA saved this too. It’s now permanent.
This is huge for small business stability. Knowing that 20% of your income isn't suddenly going to become taxable in 2026 allows for much better long-term planning. The income limits for this deduction are also moving up with inflation; in 2026, the phase-ins start at $201,775 for singles and $403,550 for joint filers.
What Actually Is Expiring?
Not everything made the cut into the permanent "forever" pile. While the core income tax changes were saved, some specific credits and incentives are still hitting a wall.
- Energy Credits: The Energy Efficient Home Improvement Credit (25C) and the Residential Clean Energy Credit (25D) are currently set to end for property placed in service after December 31, 2025. If you were planning on installing solar panels or a high-efficiency heat pump, you might want to get that done before the ball drops this year.
- The "Senior Bonus": There’s a new $6,000 deduction for folks over 65 that was added in 2025. While it’s great for now, this specific provision is actually scheduled to expire in 2029.
- Bonus Depreciation: This one has been a slow-motion car crash for businesses. It used to be 100%, then it dropped to 80%, then 60%. In 2026, it hits 20%, and by 2027, it hits zero.
The Hidden Winners: Heirs and Large Estates
The Trump tax cuts originally doubled the estate tax exemption, meaning you could pass on a lot of money without the government taking a cut. Most people thought this would revert to around $7 million in 2026.
Surprise: The new law pushed it even higher. For 2026, the estate tax exclusion is a whopping $15 million per person. For a married couple, that’s $30 million you can pass down tax-free. If you're in that bracket, 2026 is looking like a very good year for your heirs.
Actionable Steps for Your 2026 Tax Strategy
Now that the "cliff" has been mostly paved over, how should you actually handle your money?
- Check Your Withholding: Since the 10% and 12% brackets got a bigger inflation adjustment than the others, you might actually be over-withholding. It’s worth running your numbers through the IRS estimator in early 2026.
- Max Out Energy Credits Now: If you're thinking about home upgrades, do them in 2025. Those credits are some of the few things that actually have an expiration date looming.
- Rethink Your SALT Strategy: If you’re a high-earner in a high-tax state, that $40,000 cap is a game changer for 2026. You might actually want to itemize again instead of taking the standard deduction.
- Small Biz Planning: With the 199A deduction made permanent, you don't need to rush income into 2025. You can keep your normal billing cycle without fear of a 2026 tax spike.
The bottom line is that the "Trump tax cuts" didn't really expire—they just got a new name and a permanent seat at the table. While there are a few lingering deadlines in the late 2020s, the immediate threat to your 2026 paycheck is mostly gone. Keep an eye on those energy credits, though; those are the real "cliffs" hiding in the fine print.
Key Takeaway: For the 2026 tax year, expect lower rates and higher deductions to remain in place due to the One Big Beautiful Bill Act, though certain green energy incentives and business depreciation benefits will continue to phase out or disappear entirely.