.png "Understanding the Tax Cuts and Jobs Act: Key Changes Explained")
What Was the TCJA?
The Tax Cuts and Jobs Act (2017) was the largest tax reform in decades, lowering rates for individuals and businesses while simplifying some tax rules.
Key Changes for Individuals
- Lower tax rates: Top rate dropped from 39.6% to 37%
- Higher standard deduction: Nearly doubled ($12k single/$24k married)
- Eliminated exemptions: Removed personal/dependent exemptions
- Limited deductions: Capped SALT at $10k, mortgage interest at $750k
Family Impacts
- Child Tax Credit doubled to $2,000 per child
- More families qualified due to higher income limits
- Up to $1,400 became refundable
Business Changes
- Corporate tax rate cut from 35% to 21%
- 20% pass-through deduction for small businesses
- Full expensing for business investments
What's Next?
Individual provisions expire in 2025 unless extended. Corporate changes are permanent.
Key Takeaways
- Most taxpayers saw immediate tax cuts
- Simplified filing for many (fewer itemizers)
- Businesses received significant permanent cuts
- Future changes likely as provisions sunset
Consult a tax professional to understand how these changes specifically affect your situation.