{"id":11792,"date":"2018-03-02T08:00:57","date_gmt":"2018-03-02T14:00:57","guid":{"rendered":"http:\/\/taxprocenter.proconnect.intuit.com\/?p=11792"},"modified":"2018-03-23T08:51:29","modified_gmt":"2018-03-23T13:51:29","slug":"tax-reform-101-for-families","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/tax-reform-101-for-families\/","title":{"rendered":"Tax Reform 101 for Families"},"content":{"rendered":"

The Tax Cuts and Jobs Act<\/a> is the largest piece of tax reform legislation in 30 years and was signed into law on Dec. 22, 2017. For most taxpayers, these tax changes impact tax year 2018<\/strong> and not tax year 2017. Overall, the changes associated with this act will lower taxes for individuals and small businesses.<\/p>\n

The following infographic provides a glimpse at the impact for a typical family of four before and after the tax changes are applied. This is a mock scenario for you to review and share with your clients, whose results may differ.<\/p>\n

\"tax<\/p>\n

Highlights of Changes Applicable to Families<\/strong><\/p>\n

Lower Tax Rates<\/strong><\/p>\n

There are seven tax rates under the new law: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Here is the tax rate schedule for joint filers:<\/p>\n

\"Married<\/p>\n

Standard Deduction Increased<\/strong><\/p>\n

The standard deduction for taxpayers not itemizing deductions on Schedule A is increased to $24,000 married filing joint, $18,000 head of household and $12,000 for other filing statuses. For taxpayers who are itemizing deductions, there is no longer a phase-out for high-income earners.<\/p>\n

Personal Exemption Repealed<\/strong><\/p>\n

Under prior law, the personal exemption was $4,050. This exemption has been repealed under the Tax Cuts and Jobs Act.<\/p>\n

Child Tax Credit<\/strong><\/p>\n

The child tax credit for children under 17 years old is doubled from $1,000 to $2,000, and $1,400 of the credit is refundable and applies when there is no tax liability. The income levels when the credit phases out are increased to $400,000 for joint filers and $200,000 for others. A $500 non-refundable credit is available for dependents who are not your children. A Social Security number for the child is now required to receive the credit.<\/p>\n

State and Local Tax Deduction<\/strong><\/p>\n

The itemized deduction claimed on Schedule A for state and local taxes is now limited to $10,000 ($5,000 for married filing separately) on the aggregate of the following items: (no limit under prior law):<\/p>\n