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 (ie: 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 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.