On 12/22/2017, the Tax Cuts and Jobs Act was signed into law. The provisions in this bill generally affect tax years 2018-2025. A summary of the bill's tax provisions are provided below. The full bill, titled H.R.1 - An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018 can be viewed on the CONGRESS.GOV website.

Tax Cuts and Jobs Act

This bill amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.

With respect to individuals, the bill:

• replaces the seven existing tax brackets (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) with a different seven brackets (10%, 12%, 22%, 24%, 32%, 35%, and 37%),
• increases the standard deduction,
• repeals the deduction for personal exemptions,
• increases the child tax credit,
• temporarily reduced the medical expense deduction floor from 10% to 7.5%,
• limits the mortgage interest deduction for debt incurred after November 2, 2017, to mortgages of up to $750,000 (currently $1 million),
• limits the deduction for state and local income or sales taxes not paid or accrued in a trade or business,
• temporarily suspends miscellaneous itemized deductions,
• temporarily suspends the overall limit on itemized deductions,
• temporarily suspends the deduction for moving expenses,
• Repeals the deduction for alimony payments

For businesses, the bill:

• reduces the corporate tax rate from a maximum of 35% to a flat 21% rate,
• reduced the dividends received deduction,
• qualified real property is now considered Section 179 property,
• increases the depreciation limits for luxury automobiles and personal use property,
• modifies the net operating loss deduction,
• repeals the deduction for income attributable to domestic production activities

The bill also repeals or modifies several additional credits and deductions for individuals and businesses.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.