Wed. Apr 14th, 2021

The Tax Cuts and Jobs Act of 2017 includes many changes, including reducing the tax rates of seven different tax brackets.  Here are some other changes that may impact you:

  • The standard deduction increases to $12,000 for an individual and $24,000 for a family. This change is expected to decrease the number of people who itemize deductions from 30% to as few as 5%.
  • Miscellaneous expenses are no longer deductible (i.e.: tax preparer fees and un-reimbursed business expenses)
  • There is no longer a deduction per dependent.
  • The child tax credit increases to $2,000 per child under 17. Up to $1,400 per child is refundable. You may also qualify for a new $500 credit for non-child dependents (called a Family Tax Credit). However, there are many restrictions, including that the dependent cannot earn more than $4,150 in 2018.
  • In 2018 you can deduct medical expenses that exceed 7.5% of your AGI (in 2019, it increases to 10%).
  • Moving expenses are no longer deductible (and they can no longer be reimbursed tax-free).
  • The AMT (alternative minimum tax) limits have been significantly increased to limit the number of taxpayers subjected to it.
  • The estate and gift tax exemptions are doubled ($11.2 million in 2018).

Most of these changes expire in 2025, unless Congress extends them or makes them permanent.