The TCJA Provisions Have Expired. Here Is What That Means for Business Owners in 2026.

The individual tax provisions of the Tax Cuts and Jobs Act of 2017 expired on December 31, 2025. Congress did not pass a permanent extension before the deadline. As of April 2026, legislative negotiations are ongoing — the reconciliation package that would extend many of these provisions is still moving through Congress — but the rules that governed your 2025 tax return are not the same rules that govern your 2026 income. For business owners and high-income professionals, that distinction matters.

The deadline has passed. The question now is not what you should have done — it is what you should do next, under the rules as they stand today.

What Changed on January 1, 2026

The top marginal income tax rate reverted from 37% to 39.6% for income above approximately $578,125 (single) or $693,750 (married filing jointly). The standard deduction dropped by roughly half — from approximately $30,000 for married filers to approximately $15,000. The alternative minimum tax exemption reverted to its pre-2018 level, pulling more high-income taxpayers back into AMT territory. And the Section 199A Qualified Business Income deduction — the 20% pass-through deduction that benefited every S-corp, partnership, and sole proprietor — expired.

The estate and gift tax exemption also dropped — from approximately $13.6 million per person to roughly $7 million. Married couples who previously could shelter over $27 million from federal estate tax now face a combined exemption of approximately $14 million. Gifts made before December 31, 2025 under the higher exemption are permanently sheltered; the IRS confirmed those gifts will not be clawed back. But for clients who did not act before the deadline, the planning conversation is different now.

What Is Still Uncertain

Congress is actively working on a reconciliation package that would extend many of the expired TCJA provisions — potentially retroactively to January 1, 2026. As of April 2026, the outcome is genuinely uncertain. Some provisions may be made permanent. Others may be extended temporarily. Some may not survive the legislative process at all. The QBI deduction, in particular, has significant support in Congress but faces budget scoring challenges.

I want to be direct about what this uncertainty means for planning: it does not mean you should wait. Planning around legislative speculation is not a strategy. The rules as they stand today are the rules you should plan around, with a clear understanding of what changes if Congress acts — and what does not.

What Business Owners Should Be Doing Right Now

The expiration of the TCJA provisions changes several planning calculations that were settled under the prior rules. Here is how I am approaching this with clients in 2026:

1. 01Revisit your entity structure. The loss of the QBI deduction changes the math on S-corporation vs. C-corporation vs. partnership structures for many business owners. A C-corp's 21% flat rate now looks more attractive relative to the 39.6% top pass-through rate for some businesses. This is worth modeling with your CPA.
2. 02Accelerate deductions where possible. With rates higher in 2026, deductions are worth more. Accelerating deductible expenses — equipment purchases under Section 179, retirement plan contributions, prepaid business expenses — has a higher after-tax value than it did in 2025.
3. 03Revisit your estate plan. If your estate is between $14 million and $27 million and you did not complete gifting before December 31, 2025, the planning options are more limited but not exhausted. Irrevocable trusts, GRATs, and family limited partnerships can still move wealth efficiently at current exemption levels.
4. 04Model Roth conversion under the new rates. The case for Roth conversions is stronger now that ordinary income rates are higher. Converting traditional IRA balances to Roth at 39.6% is painful — but it may be less painful than paying that rate on required minimum distributions in retirement, especially if rates increase further.
5. 05Do not make permanent decisions based on temporary rules. If Congress retroactively extends the TCJA provisions, some of these calculations change. Structure your decisions so they are defensible under either outcome.

A Note on the QBI Deduction Specifically

For pass-through business owners, the expiration of Section 199A is the single most significant change in the 2026 tax landscape. A business generating $500,000 of qualified business income previously received a $100,000 deduction — worth $37,000 in federal tax savings at the 37% rate. That deduction is gone. The effective tax rate on pass-through income has increased by more than the headline rate change alone suggests.

If Congress restores the QBI deduction retroactively, it will likely be with modifications — potentially a lower deduction percentage, tighter income limits, or a phase-out structure. I am watching the legislative developments closely and will update clients as the picture becomes clearer. In the meantime, I have written a separate article on how the QBI deduction worked and what its loss means for compensation strategy and entity structure decisions.

If you have not reviewed your tax strategy in light of the 2026 changes, that conversation is overdue. The rules changed on January 1. The planning implications are real and immediate. I am happy to walk through the numbers with you.