Your Tax Rates Are Expiring. Here's What to Do Before 2026.
If you're a high-income earner or business owner, you're operating under some of the most favorable tax rates in modern history — and most people have no idea those rates are about to disappear.
The window closes December 31, 2025. Here's what that means for your wallet, and what to do about it right now.
The Clock Is Ticking on Your Current Tax Rates
In 2017, Congress passed the Tax Cuts and Jobs Act (TCJA) — the most sweeping overhaul of the U.S. tax code in decades. It cut rates across the board, nearly doubled the standard deduction, created a powerful new deduction for pass-through business owners, and dramatically raised the estate and gift tax exemptions.
There was a catch: most of those provisions were written with an expiration date. They sunset on December 31, 2025. After that, the tax code largely reverts to its pre-2017 structure — unless Congress acts, which as of now, it has not.
Here's what's at stake in plain terms:
- The top marginal rate drops back from 37% to 39.6% — a near 3-point jump
- The standard deduction gets cut roughly in half
- The 20% qualified business income (QBI) deduction for pass-through entities disappears
- The estate and gift tax exemption — currently over $13 million per person — is expected to drop to roughly $7 million
Most high earners don't know any of this is happening. That's not their fault — it's rarely what comes up in a once-a-year tax filing meeting. But it is a problem, because the planning window is closing fast.
What Happens If You Do Nothing
Let's make this concrete. A business owner reporting $600,000 in taxable income who does nothing before the sunset could easily see their federal tax bill increase by $15,000 to $30,000 or more in a single year — just from the rate change alone.
Now layer on the QBI deduction. If you own an S-Corp, partnership, LLC, or run a sole proprietorship, you may currently be eligible to deduct up to 20% of your qualified business income. On $400,000 of QBI, that's an $80,000 deduction — worth $29,600 in annual tax savings at the 37% rate. If that deduction disappears after 2025, that savings disappears with it.
This isn't hypothetical or speculative. The sunset is written directly into law. Every dollar of planning you do in 2025 is a dollar of tax you're choosing to keep. Every dollar you ignore is a dollar you're handing back.
Move #1: Accelerate Income Into 2025
Counterintuitive as it sounds, for many high earners the right move right now is to pull income forward into 2025 — before rates go up.
If you have flexibility over when you recognize income — through bonuses, S-Corp distributions, consulting fees, or deferred compensation — seriously consider taking it in 2025 while the 37% top rate is still in effect. Waiting until 2026 or beyond could mean paying 39.6% or more on that same income.
Roth conversions are one of the most powerful moves in this environment. If you've been sitting on a traditional IRA or a pre-tax 401(k) and considering a conversion, 2025 is a compelling window. You pay the tax now, at today's rates, and everything inside the Roth grows tax-free forever.
The math is real: a surgeon converting $200,000 from a pre-tax account in 2025 instead of waiting until 2027 could save $5,200 or more on that conversion alone — just from the rate differential. That's not a rounding error. That's a family vacation, a year of college tuition, or an additional investment.
Move #2: Lock In Deductions Before Rules Change
On the deduction side, 2025 is the year to be aggressive — strategically, not recklessly.
Charitable bunching is one of the most underused strategies for high earners. Instead of making modest annual charitable donations, you bundle two or three years' worth of giving into 2025 to clear the itemized deduction threshold and maximize the current-year write-off. Pair this with a Donor-Advised Fund (DAF) and you get the deduction now — at today's rates — while distributing the funds to your chosen charities over several years on your own schedule.
If you own a pass-through entity — an S-Corp, partnership, or LLC — the QBI deduction deserves immediate attention. You may be eligible to deduct 20% of your qualified business income right now. That deduction requires your business to be structured correctly to qualify. If your entity hasn't been reviewed recently, you may be leaving money on the table today, before the deduction even disappears.
Business expense timing matters too. Accelerating legitimate deductible expenses into 2025 — professional fees, equipment, software, marketing spend — locks in the write-off at the current, more favorable rates.
Move #3: Max Out Business Deductions Now
For business owners, 2025 offers some of the last best opportunities to shelter serious income before the rules shift further.
Bonus depreciation is already phasing down. It was 80% in 2023, dropped to 60% in 2024, and is now at 40% in 2025. If you've been thinking about purchasing equipment, vehicles, or other depreciable business assets, waiting is actively costing you. A $200,000 equipment purchase taken at 40% bonus depreciation today is still $80,000 in immediate deductions — combined with Section 179, the numbers can be even stronger depending on your situation.
Defined benefit and cash balance plans are among the most powerful tools available to high-earning business owners and self-employed professionals. Depending on your age and income, these plans can allow you to shelter $100,000 to $300,000 or more in pre-tax dollars per year. That deduction is taken at today's rates. The growth is tax-deferred. For a surgeon, attorney, or franchise owner in their 40s or 50s, this can be a transformational strategy.
Finally — entity structure. If your S-Corp, LLC, or partnership hasn't been formally reviewed in two to three years, now is the time. The QBI deduction is structure-sensitive, and so are many of the other benefits available to business owners. A strategy that worked in 2022 may need updating for 2025.
This Window Closes on December 31, 2025
The risk for most high earners isn't that they'll make the wrong move. It's that they'll make no move at all.
Most firms file once a year and move on. They're not calling you in April to talk about Q4 strategy. They're not flagging the TCJA sunset or running projections on your Roth conversion timing. That's not a criticism — it's just how the traditional model works. Year-round tax planning is a different discipline, and it's one that pays for itself many times over at the income levels we're talking about.
The high earner tax planning moves that matter most in 2025 — Roth conversions, income acceleration, deduction bunching, entity reviews, retirement plan contributions — all have to be executed before December 31. Not in March when you're filing. Not in January when it's too late. Now.
Review your 2025 income picture today. Run the projections. Make the moves that lock in today's rates and today's deductions while you still can.
Ready to Make Your Move Before the Deadline?
If you're earning $300,000 or more, there are specific, proven strategies available to you before year-end that most firms will never bring up. The TCJA expiration isn't a news story — it's a planning event, and it requires action.
Book a free 30-minute strategy session. We'll look at your specific income picture and identify the moves that make the most sense for your situation before the window closes.
Call: (619) 280-2700 Email: info@RoadmapTax.com
The strategies described in this post are for informational purposes only and do not constitute personalized tax advice. Consult a qualified tax advisor to evaluate what's appropriate for your specific situation.