The Tax Cliff Is Coming: What the Expiring TCJA Provisions Mean for High Earners

Don’t wait for 2026 to rethink your tax strategy—start optimizing while the window’s still open.

What’s Happening in 2026?

The Tax Cuts and Jobs Act (TCJA) of 2017 brought sweeping changes to the tax code—including lower income tax rates, a near doubling of the standard deduction, and a $10,000 cap on the SALT (State and Local Tax) deduction. But these provisions weren’t permanent.

Unless Congress acts, many of them will expire at the end of 2025, effectively raising taxes on high earners and residents in high-tax states.

Key TCJA Provisions Expiring

SALT Deduction Cap: The $10,000 limit on deducting state and local taxes will sunset
Standard Deduction: Will revert to pre-TCJA levels (about half the current amount)
Personal Exemptions: Will return (these were eliminated under TCJA)
Individual Tax Rates: Will increase, especially for top brackets
Estate & Gift Tax Exemption: Set to be cut roughly in half

Translation for high earners: Your taxable income may jump, and your deductions may shrink.

The SALT Deduction Cliff

One of the most impactful changes for high-income Californians, New Yorkers, and others in high-tax states is the scheduled return of the unlimited SALT deduction.

Here’s what happened after the TCJA capped it at $10,000 in 2018, according to USA Facts:

The share of tax returns claiming SALT fell from 30.4% in 2017 to just 9.3% in 2022
Among earners making over $1M/year, the average SALT deduction plummeted from $282,402 to $11,233
In New York, the average SALT deduction dropped from $23,804 to $9,417
The SALT deduction as a percent of itemized deductions for $1M+ earners fell from 60.5% to just 3.9%

Why it matters: When the cap is lifted in 2026, high earners could regain one of their most powerful deductions—but that could also be offset by higher marginal tax rates.

What’s At Stake for High Earners

If you’re earning $250K+, own a home in California, or receive significant equity compensation, here’s what the tax cliff could mean:

Itemizing will matter again: Especially for those with high property taxes or large charitable donations
You could pay more in taxes overall: Even if some deductions return, top tax rates will likely increase
Gifting & estate strategies may shift: With a lower estate exemption, ultra-high-net-worth families could face higher transfer taxes

2025 Is a Critical Planning Year

There’s still time to act—but the window is closing. Here’s what to do now:

1. Consider Accelerating Deductions

If the SALT cap is lifted, 2026 and beyond may favor itemizing again. But for now, you may want to front-load charitable donations, business expenses, or other deductible spending before the rules change.

2. Maximize the Current Gift & Estate Tax Exemption

The current federal estate exemption is ~$13.6M per individual. In 2026, it’s expected to fall to ~$7M. Strategic gifting in 2025 could lock in today’s higher thresholds.

3. Reassess Roth Conversion Timing

With tax brackets likely rising, converting pre-tax dollars to Roth IRAs in 2025 might save you more long-term—especially if your income will drop in retirement.

4. Run Multi-Year Tax Projections

Tax planning in isolation is shortsighted. Work with a fiduciary advisor or CPA to model your situation over 3–5 years and evaluate what’s best to do now versus later.

Key Takeaway

The 2026 tax cliff isn’t just coming—it’s already shaping smart financial strategies today.

High earners can’t afford to wait and react. You need to plan ahead, while the rules are still in your favor.

Let’s Build Your Pre-Cliff Tax Strategy

At RYSE, we help physicians, tech employees, and business owners navigate tax transitions like these—with forward-thinking, multi-year strategies tailored to your life.

👉 Schedule a free 15-minute introductory session

Let’s make sure 2026 doesn’t catch you off guard.