In late December, the Tax Cut and Jobs Act was passed. Many changes were made for businesses as well as individuals. All of the BUSINESS changes are permanent. All of the INDIVIDUAL changes expire after 2025 unless somewhere along the line Congress makes them permanent.
Some things haven't changed. These include:
- Your retirement plans such as IRAs and 401(k)s have not changed. Nor have any of the tax benefits for Health Savings Accounts or 529 plans.
- Health insurance mandate penalty sets to zero in 2019, but remains in 2018.
- The alimony rules for taxes do not take affect until 2019.
Does anything affect my 2017 taxes? Yes. the only retroactive change made for individuals filing their 2017 return is the rollback of the medical deduction from 10% of AGI to 7.5% AGI.
So, what's in it for me?
Lower tax rates, a larger standard deduction, and some lower tax rates for all businesses (including sole proprietors). The child tax credit has been doubled to $2,000 per qualifying child. However, the personal exemption has been eliminated, and the scale-back or end of several itemized deductions.