How Will Tax Reform Affect Your Taxes This Year?
The Tax Cuts and Jobs Act (TCJA) signed into law on December 22, 2017, has brought significant changes for individuals at the federal level. It is the largest piece of tax reform legislation in 30 years.
Major changes for individual taxpayers include:
- Lowering individual income tax rates
- Increasing the standard deduction and child tax credit
- Repealing certain personal and dependent exemptions
- Eliminating certain itemized deductions
- A new $10,000 limit on the total tax deduction for state income taxes, sales and use taxes, personal and real property taxes combined
- Changes in the limitations on tax deductions on mortgage interest
The majority of the tax law changes are in effect for the tax year that begins after January 1, 2018. (That's right now!). To prepare yourself for the new tax law changes—and to avoid any surprises when you file your 2018 tax returns—you should review the rules carefully now and determine how they will affect your 2018 tax situation.
Also, California residents should note that the state of California tax code will most like not conform to most of the federal changes, so prepare accordingly.