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A Quick Review of Changes Made in the Tax Cuts and Jobs Act

The passage of the Tax Cuts and Jobs Act (TCJA) on December 22, 2017 instituted major changes to the tax code, and below are some highlights of what might affect your taxes when filing begins in 2019:

 

Tax Rates

 

The TCJA reduced individual tax rate to 10%, 12%, 22%, 24%, 32%, 35%, and 37% for tax years 2018-2025.  The tax rate for capital gains and qualified dividends remain at 0%, 15%, and 20%.

 

 

Personal Exemption and Standard Deduction

 

The TCJA eliminated personal exemptions.  Standard deductions essentially doubled by encompassing the old standard deduction and adding the personal exemption. 

 

For years 2018 through 2025, the standard deduction has been increased to:

  • $24,000 for Married Filing Joint or Surviving Spouse

  • $18,000 for Head of Household

  • $12,000 for Married Filing Separate or any Single filer

*The additional standard deduction for the elderly and the blind is not changed.

 

Child Tax Credit and Other Dependent Credit

 

The child tax credit has been expanded to include dependents over 17 ($500) and was doubled for those under age 17 ($2,000).

 

 

Itemized Deductions

 

Several changes have been made to the various categories of itemized deductions.

 

 

 

Moving Expenses

 

Moving expenses are no longer deductible for taxpayers who are not members of the Armed Forces moving due to a permanent change of station.

 

 

Alimony

 

Effective for any divorce or separation executed after December 31, 2018, alimony paid is no longer deductible, thus alimony received is no longer taxable.

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