In December 2017, Congress passed the Tax Cut and Jobs Act (TCJA). The Act went into effect in 2018, which means many of the new reforms will apply when we file our taxes in 2019. Since the new year is just around the corner, you may already be wondering what the new changes will look like and how they’ll affect you.
The changes are substantial (some consider this the most comprehensive tax overhaul in decades!) and, for many of us, are difficult to grasp. To assist in your tax journey, we’ve provided a brief overview of what you can expect in the year ahead.
What are some of the major changes in the TCJA?
There are now new tax bracket income limits and lower tax rates for individuals and couples.
The standard deductions for individuals and couples are nearly doubled (for single filers: $6,350 to $12,000; for joint filers: $12,700 to $24,000).
Personal exemptions have been eliminated, along with many other popular deductions.
The child tax credit is doubled (from $1,000 to $2,000).
The corporate tax rate has been reduced significantly (down from 35% to 21%).
The individual healthcare mandate (which you may remember from the ACA) has been repealed, eliminating a tax penalty for those without health insurance.
And so much more! The IRS has a comprehensive overview of tax reform changes for individuals, businesses, and tax-exempt entities. You can also check out IRS Publication 5307: Tax Reform Basics for Individuals and Families.
While most of these changes are already in effect, there are some exceptions. For a handy timeline of which changes are effective when, check out this helpful resource.
Tax professionals: here’s how you can learn more.
If you’re a tax lawyer or accountant, you will need to become intimately familiar with the new reforms in order to properly advise your clients. For attorneys, Lawline’s latest tax law CLE curriculum will get you up-to-speed on all the latest changes so you can secure the best outcome for your clients. If you’re still hungry for more, you can browse through our comprehensive CLE catalog.
For those of you who are accountants or tax preparers, check out our helpful program Federal Income Tax Changes - 2018 or any of our other CPE tax courses. You can also access any of these by signing up for our free trial!
Good luck and fingers crossed for a refund!