As most of us were getting ready to celebrate Christmas, President Trump was signing into law the Tax Cuts and Jobs Act, or TCJA – a sweeping tax reform. Due to the length & complexity of the new law, we have received a lot of questions here at Legacy in January. Most articles that I have read go into depth about the changes for individuals, corporations, trusts, and estates. My hope is to provide you with a simple list of the ten most important changes that will impact personal tax payers. Sweet and simple.
1) The seven tax brackets have changed from 10%, 15%, 25%, 28%, 33%, 35%, & 39.6% to 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The taxable income within each bracket also shifts slightly. See the chart below.
2) The standard deduction effectively doubles, to $12,000 per person as compared to $6,350 per person in 2017.
3) The individual exemption, which applied to each person in the household, is now gone.
4) The child credit doubles to $2,000, as well as an increase in the phase-out for the Child Tax Credit to $200,000/$400,000.
5) State and local taxes are now capped at $10,000 annually for Single & Married Filing Jointly.
6) Mortgage interest is now limited to interest on acquisition debt up to $750,000, which is decreased from the previous $1 million.
7) Deductions for moving expenses and most miscellaneous itemized expenses are eliminated.
8) The estate tax exemption will almost double to $11.2 million or $22.4 million for a married couple.
9) TCJA repeals the Individual Healthcare Mandate, meaning individuals no longer face a tax fine or penalty for not having health insurance.
10) The exemption amount for Alternative Minimum Tax is increased, as well as many of the items which were pulled into Alternative Minimum Tax from Schedule A are now gone or limited.
In the coming months, we will be releasing blogs that dive deeper into the implications of the Tax Cuts and Jobs Act for individuals in different life stages – newly married, retired, working adults with children, etc. If you want to find out how you specifically could be impacted by these changes, give us a call! We look forward to keeping you informed.

This information is not intended to be a substitute for personalized advice from a qualified tax professional. The SFA does not give tax or legal advice.