Honestly, walking into tax season always feels a bit like a guessing game. But back in late 2017, the game changed for everyone when the Tax Cuts and Jobs Act (TCJA) was signed into law. People called it Trump's tax cuts 2017, and it was the biggest overhaul of the U.S. tax code in over thirty years.
It was massive. It was controversial. And now, in 2026, we’re still feeling the ripples—partly because a bunch of those changes were never meant to be permanent.
The Big Switch: What Actually Changed?
Basically, the law slashed the corporate tax rate from a high of 35% down to a flat 21%. That part? Permanent. But for the rest of us—regular people with W-2s and mortgages—the changes were a bit more of a "limited time offer."
The bill lowered individual tax rates across almost all brackets. The top rate dropped from 39.6% to 37%, and the standard deduction nearly doubled. For a single filer in 2018, that jump went from $6,350 to $12,000. It sounds great on paper, right? More money in your pocket every month.
But it wasn't all just free cash. To pay for these cuts, the law gutted or capped a lot of popular deductions. The one that caused the most screaming was the SALT cap.
If you live in a high-tax state like New Jersey or California, you used to be able to deduct almost all your state and local taxes from your federal bill. The 2017 law put a $10,000 ceiling on that. Suddenly, a lot of middle-class families in those states realized their "tax cut" was actually a wash—or even a hike.
The Pass-Through Twist
Then there's the Section 199A deduction. It’s a bit technical, but essentially it allowed owners of "pass-through" businesses—think LLCs, partnerships, and sole proprietorships—to deduct 20% of their qualified business income.
✨ Don't miss: Was Dominion Voting Sold? What Actually Happened With the Ownership
The idea was to help small businesses compete with the big guys who just got that 21% corporate rate. According to a study by the Tax Policy Center, this was one of the most complex parts of the law, and while it helped many freelancers and contractors, it also became a playground for high-income earners to "game" their income to lower their bills.
Did It Actually Grow the Economy?
This is where the math gets messy.
Proponents of the 2017 law, like those at the Tax Foundation, argued that lowering the cost of capital would lead to an explosion in investment and higher wages. They predicted a 1.7% increase in the long-run size of the GDP.
On the other side, the Congressional Budget Office (CBO) and the Congressional Research Service have been more skeptical. In a 2025 review of the data, the CRS found that while there was a bump in corporate investment in 2018, it didn't necessarily translate into the sustained "economic miracle" some had promised. Wages did grow, but many economists argue that was more about a tight labor market than the tax code itself.
The 2026 Reality: The "Sunset" Problem
Here is the thing nobody liked to talk about back in 2017: the individual tax cuts had an expiration date.
Most of the provisions that helped regular families—the lower rates, the higher standard deduction, and the expanded Child Tax Credit—were scheduled to "sunset" at the end of 2025.
Since we are now in 2026, that "cliff" is the reality we're staring at. Unless Congress acted to extend them (which has been a massive political football over the last year), those rates revert to the old 2017 levels.
Imagine your standard deduction getting chopped in half overnight. That’s what "sunsetting" looks like. It’s a built-in tax hike that was baked into the original bill to make the 10-year budget numbers look better at the time.
👉 See also: Are Stock Markets Open Black Friday? What Most People Get Wrong
Who Won and Who Lost?
Looking back, the distribution of the benefits was definitely top-heavy. The IRS data eventually showed that while almost everyone got some kind of break, the largest percentage increases in after-tax income went to the highest earners.
- The Wealthy: Benefited from the lower top rate, the corporate cut, and the doubled estate tax exemption.
- The Middle Class: Saw modest gains, often offset by the SALT cap or the loss of personal exemptions.
- Small Businesses: Many loved the 20% QBI deduction, but it's one of the items on the 2025 chopping block.
Misconceptions You've Probably Heard
You've probably heard people say the tax cuts "paid for themselves."
That’s a myth.
Even with the economic growth we saw in 2018 and 2019, the total federal revenue didn't magically surge enough to cover the $1.5 trillion to $1.9 trillion price tag. The national debt definitely took a hit.
Another weird one? The idea that the law "simplified" taxes. While the higher standard deduction meant fewer people had to itemize, the new rules for business owners and the changes to international tax law made things way more complicated for anyone with a side hustle or global interests.
What You Should Do Now
If you're trying to navigate the wreckage of the 2017 rules and the current 2026 landscape, you've got to be proactive.
Review your withholding immediately. With many of the 2017 provisions expiring or changing, the amount of money being taken out of your paycheck might not match what you actually owe at the end of the year.
Talk to a pro about your business structure. If you’ve been relying on that 20% QBI deduction, you need to see if your current LLC or S-Corp status still makes sense under the new 2026 rules.
Max out your 401(k) or IRA. When tax rates go up, the value of "pre-tax" contributions goes up too. It’s one of the few ways left to lower your taxable income without needing a bunch of complex deductions.
Check the Child Tax Credit status. This was one of the most volatile parts of the law. Make sure you know exactly what the current per-child amount is for this filing year, as it's likely much lower than the "bonus" years we saw during the pandemic or the peak of the TCJA.
The 2017 tax cuts weren't just a one-time event; they were a shift in the landscape that we're still trying to map out today. Understanding which parts are permanent and which are vanishing is the only way to keep your finances from getting caught in the sunset.
Practical Next Steps for Tax Year 2026:
- Compare your 2024 and 2025 tax returns to identify which specific deductions (like the SALT cap or the $2,000 Child Tax Credit) had the biggest impact on your bottom line.
- Use the IRS Tax Withholding Estimator to adjust your W-4; this prevents a massive "surprise" bill if your tax bracket shifted back up this year.
- If you are a business owner, schedule a Q1 consultation with a CPA to discuss the "One, Big, Beautiful Bill" adjustments that may have replaced or modified the expiring Section 199A provisions.