1. The 2018 Tax Reformation was deemed one of the largest in most recent years. Describe what were the major changes made from the 2017 tax year and give examples of how it may have affected taxpayers

2018 FEDERAL TAX RULES & REGULATIONS

The 2018 Tax Reform Changes

1. The 2018 Tax Reformation was deemed one of the largest in most recent years. Describe what were the major changes made from the 2017 tax year and give examples of how it may have affected taxpayers 1

Now that you have learned all of the federal tax regulations, from the multiple facets of income to credits & deductions, let's now put this into practice by preparing a 2018 tax return! Let's first visit the changes that took place from the 2018 Tax Reformation:

The new tax law increases the standard deduction and child tax credit and eliminates or reduces other deductions.

The law nearly doubles the standard deduction for most filers.

{Deductions lower the amount of income that you pay tax on.}

Standard deduction is now $12,000 for individuals, $18,000 for heads of household, and $24,000 for married couples filing jointly.
If you used to itemize deductions, it may no longer be worth it. Your standard deduction may be more than your total itemized deductions now.

The maximum Child Tax Credit has doubled to $2,000.

{Tax credits reduce your tax bill dollar-for-dollar.}

More families will qualify as income limits increase to $200,000 for individual filers and $400,000 for married filing jointly.
Even if you don’t owe any tax, you can still get refunded up to $1,400 per child when you claim the child tax credit on your return.

There’s a new $500 credit for other dependents.

Claim it for your children age 17 and older, including college students, and other qualifying relatives in your household.

Many itemized deductions have changed.

If you do itemize, check for new rules in each category. These are just a few.

The total deduction for state and local income, sales, and property taxes is now limited to $10,000.
Interest on a home equity loan is now deductible only if you use the money to build or renovate your home.
Moving expenses, tax preparation fees, and job expenses are no longer deductible for most filers.

The personal and dependent exemptions have been eliminated.

{These exemptions lowered your taxable income, just as deductions do.}

The increases in the standard deduction and the child tax credit may help offset the loss of the personal and dependent exemptions.

Visit https://www.irs.gov/tax-reform to learn more about how the changes affect taxpayers.

Breaking down the 2018 Tax Reform changes