New law: The standard deduction for married filing jointly would increase to $24,000 for joint filers $12,000 for single taxpayers and $18,000 for heads of households, according to the TPC analysis. The increased deduction ends after 2025. Previous law: The standard deduction for married filing jointly is $12,700 for tax year 2017 $6,350 for single taxpayers and $9,350 for heads of households, according to the IRS. The standard deduction is the amount that you can deduct from your income before calculating your tax liability if you do not itemize your deductions. New law: The AMT exemption amounts will increase to $70,300 for single filers and $109,400 for joint filers and will phase out for those taxpayers at $500,000 and $1 million, respectively, according to the nonpartisan Tax Policy Center’s analysis of the bill. Previous law: For the 2017 tax year, the AMT exemption amount for single filers is $54,300 and begins to phase out at $120,700, and for joint filers, it is $84,500 and begins to phase out at $160,900, according to the IRS. As its name implies, the AMT is an alternative to the regular tax system and requires taxpayers earning above a certain amount to calculate their taxes twice and pay the highest amount.īecause it follows a separate set of rules, the AMT disallows some tax preferences – such as state and local tax deductions and dependent exemptions – but provides for a larger AMT exemption amount. The AMT is a parallel tax system with a separate set of rules that some taxpayers must follow when calculating their tax liability. It takes effect with the 2018 tax year, but will not apply after 2025 - unless Congress takes further action. New law: These will be the brackets that individual taxpayers will use in 2019 for the 2018 tax year, as described in Table 4 on page 200 of the conference report. Previous law: These are the tax brackets that individual taxpayers will use when filing taxes in 2018 for the 2017 tax year, according to the IRS (see pages 7-9). The bill maintains seven individual income tax brackets, but changes the tax rates and thresholds. Here we compare some of the major provisions of the new law with the previous tax code. Again, the bill received no Democratic support and was opposed by 12 Republicans. The Senate then passed the bill 51-48 along strict party lines, with one Republican senator, John McCain, not voting.īecause of minor changes in the bill made by the Senate, the House was required to pass the bill again before sending it to the president. It passed 227-203 in the House with no Democratic votes and 12 Republican “no” votes. The House and Senate approved the bill on Dec.
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