6 Strategies to Maximize Tax Savings Before the Tax Cuts and Jobs Act Sunset

The Tax Cuts and Jobs Act (TCJA) of 2017 made waves with substantial modifications to the tax code, promising immediate and lasting impacts on taxpayers. At the time this article was originally written, many of those provisions were scheduled to sunset after 2025, raising questions and creating opportunities for proactive tax planning.

Provisions originally scheduled to sunset after 2025

(Note: These were preserved or modified by the OBBBA in July 2025.)

• Individual tax rates: The TCJA lowered tax rates for individuals to 10%, 12%, 22%, 24%, 32%, 35% and 37%. These brackets were scheduled to sunset in 2026, but the OBBBA made them permanent.
• Standard deduction: The TCJA significantly increased the standard deduction, nearly doubling it from prior levels. Contrary to earlier expectations, the OBBBA kept this higher deduction intact and indexed to inflation. This provides a more generous reduction in taxable income for most filers.
• Itemized deductions:
  • State and local tax (SALT): The $10,000 deduction cap was originally set to expire in 2026. Instead, the OBBBA increased the cap to $40,000 through 2029, with annual inflation adjustments. However, this expanded deduction is subject to a phaseout for taxpayers with modified adjusted gross income (MAGI) above $500,000 in 2025, $505,000 in 2026, and increasing by 1% annually thereafter. Notably, the deduction will not phase out below $10,000. This offers expanded, though income-sensitive, relief for taxpayers in high-tax states.
  • Mortgage interest deduction: Remains at TCJA levels under the new law. Interest on mortgage debt is deductible up to $750,000 for loans originated after Dec. 15, 2017. Home equity loan interest remains deducible only if the loan I used to buy, build or significantly improve the home.
  • Miscellaneous itemized deductions: These continue to be suspended under the OBBBA. The law did not reinstate most deductions that were eliminated under the TCJA, including unreimbursed employee costs, legal fees and investment advisory fees. However, the bill did carve out one exception, which is that unreimbursed employee expenses for eligible educators are no longer treated as miscellaneous itemized deductions and may now be claimed separately.

• Expansion of the child tax credit: The OBBBA retained and permanently expanded the child tax credit. Eligible families can now claim up to $2,200 per qualifying child, with $1,700 of that amount refundable. Both figures will be adjusted annually for inflation.
• Estate tax exemption: The TCJA raised the estate tax exemption to over $11 million per individual. The OBBBA increased the exemption further to $15 million per person (or $30 million for married couples), effective 2026 and indexed annually for inflation. The higher exemption is now permanent.

Six strategies for effective tax planning after the TCJA sunset was avoided

While originally written to anticipate a TCJA sunset, these strategies remain powerful under current law.

1. Rethink when to take deductions: While the urgency to front-load deductions has eased, timing still matters. With the SALT cap expanded and tax brackets preserved, you may benefit from strategically bunching deductions in high-income years or evaluating the impact of charitable giving across tax years.
2. Maximize your retirement contributions: Contributions to 401(k) plans, IRAs, or SEP-IRAs continue to reduce taxable income and grow tax-deferred. Those age 73 or older can also take advantage of qualified charitable distributions (QCDs) from IRAs to support causes they care about while minimizing required distributions.
3. Roth conversions: Even without a rate increase ahead, Roth conversions can support long-term tax diversification. Converting assets while in a lower bracket (or spreading conversions over multiple years) may help manage future taxable income and support intergenerational planning.
4. Giving to charities: Gifting appreciated assets remains a tax-smart way to support charitable goals. Vehicles like donor-advised funds, charitable remainder trusts, or private foundations can amplify the impact of your giving while minimizing capital gains and optimizing deductions.
5. Education savings accounts: 529 plans offer tax-free growth and withdrawals for qualified education expenses. Some states also offer tax deductions or credits for contributions, providing additional planning benefits for families saving for college or K-12 tuition.
6. Contributions to health savings accounts (HSAs): No changes here. For those with high-deductible health plans, HSAs offer triple tax benefits: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-exempt.

These strategies were valuable before and they still are. The permanence of many TCJA provisions under the OBBBA offers a more stable planning environment, but thoughtful timing, strategic giving and diversified tax planning remain essential to long-term success.

Stay ahead of the changes

While the TCJA sunset scenario did not occur as anticipated, the passage of the OBBBA represents a new planning environment, not an endpoint. Whether it’s leveraging the expanded estate exemption or optimizing charitable and retirement strategies, the principles of thoughtful, forward-looking planning remain unchanged.

We encourage you to talk with your wealth manager or tax advisor to assess what these legislative changes mean for your personal financial plan. To explore the specific impacts of OBBBA, visit our in-depth breakdown here.