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On 12/22/2017, the Tax Cuts and Jobs Act was signed into law. Most of the bills provisions do not take effect until 2018, but a few take effect in 2017 or 2019. A summary of the bill's tax provisions are provided below. The full bill can be viewed HERE.

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,
  • increases the maximum Section 179 expense to $1,000,000 (currently $500,000)
  • reduction of Section 179 expense occurs when Section 179 property placed into service during the year exceeds $2,500,000 (currently $2,000,000),
  • 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.

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