The Day a CEO Called Me About the TCJA Sunset — and Why It Matters for Every Business Owner in America
Last week, I got a call from a CEO I've worked with for years. He's not the panicking type — he's built and sold multiple companies, and he doesn't get rattled easily. But this time, his voice had an edge.
"Ryan," he said, "I just found out the TCJA provisions are sunsetting. What does that mean for my tax picture next year?"
It's the call every tax strategist has been waiting for — and dreading.
Because here's the truth: the Tax Cuts and Jobs Act of 2017 (TCJA) was never permanent. Most of its individual and pass-through provisions are set to expire after December 31, 2025. And if Congress doesn't act, we're heading back to pre-2017 tax rates and rules.
For business owners and executives, this is not a drill.
What's Actually Changing
Let me break down the key provisions that could disappear or change:
Individual Tax Rates Go Up
The current brackets top out at 37%. Without action, the top bracket jumps back to 39.6%. But it's not just the top — every bracket shifts upward, meaning more of your income gets taxed at higher rates.
The QBI Deduction Disappears
If you're a pass-through business owner (LLC, S-Corp, sole proprietor), you've been enjoying the Section 199A Qualified Business Income deduction — up to 20% off your qualified business income. That goes away.
Let that sink in: a 20% deduction on your business income, gone.
Estate Tax Exemption Drops
The current exemption is approximately $13.61 million per individual ($27.22 million per couple). Without Congressional action, it reverts to roughly $7 million (adjusted for inflation).
That means millions of families who currently aren't subject to estate tax suddenly will be. If you've been planning around the current exemption, your entire estate strategy may need to be rethought.
Standard Deduction Shrinks
The nearly doubled standard deduction goes back down, which means more people will itemize — and those who don't will lose out on significant tax savings.
AMT and Child Tax Credit Changes
The Alternative Minimum Tax exemption shrinks, pulling more upper-middle-income earners back into AMT territory. The child tax credit halves from $2,000 to $1,000.
Why This CEO Was Right to Be Worried
My client — let's call him David — runs a $30M services company structured as an S-Corp. With QBI deduction and current rates, his effective tax rate has been manageable. But without the TCJA provisions:
- His QBI deduction vanishes
- His marginal rate increases
- His overall tax burden could jump by $200,000+ per year
And that's before we talk about his estate plan, which was built around the current $27M exemption.
What Smart Executives Are Doing Right Now
Here's what I'm telling every client who will listen: don't wait for Congress. Whether they act or not, you need a plan.
1. Accelerate Income Where Possible
If rates are going up, recognize income now at the lower rate. This might mean:
- Accelerating bonus payments
- Converting traditional IRA funds to Roth (at current, lower rates)
- Exercising stock options sooner rather than later
2. Lock In Current Estate Planning
With the exemption potentially dropping by more than half, now is the time to:
- Fund irrevocable trusts
- Make strategic gifts to heirs
- Review and update your estate plan with the sunset in mind
3. Re-evaluate Entity Structure
If you're a pass-through owner, the loss of QBI deduction may make C-Corp structure more attractive. We're running the numbers for several clients right now.
4. Maximize Current Deductions
Take full advantage of every deduction available under current law:
- Section 179 expensing
- Bonus depreciation (which is already phasing down)
- Retirement contributions
- Business interest deductions
5. Build a Multi-Year Tax Forecast
This isn't a one-year problem. The tax landscape could shift dramatically in 2026 and beyond. A rolling 3-5 year forecast gives you options instead of surprises.
The Bottom Line
The TCJA sunset isn't a political talking point — it's a real financial event that will affect nearly every business owner and high-income earner in America. The executives who plan now will sleep well. The ones who wait will pay for it.
If you haven't had a conversation about what 2026 looks like for your tax picture, let's have it now. Not next year. Not after Congress acts (or doesn't). Now.
Book a Taxsmithing Strategy Session, and let's build a plan that protects you no matter what happens in Washington.