Question

The United States Congress and Senate passed "The Tax Cut and Jobs Act of 2017". President Trump approved and signed the bill into law on December 20, 2017. Please pick two aspects of the bill and explain the expected result of those aspects of the new law.

Answer 1

There are a number of important changes that were made by the Tax Cuts and Jobs Act of 2017 to the individual income tax laws. This included the reforms to the itemized deductions and the minimum tax, child tax credit, the expanded standard deduction and lower marginal tax rates in all the tax brackets.

The two main important provisions of this law are stated below-

With the implementation of the Tax Cuts and Jobs Act of 2017, the individual income tax filing has become easier for 28.5 million tax filers and they can opt to the new expanded standard deduction rather than going for the itemizing deductions. The main effect of this provision will be that the overall cost of compliance will be reduced and it will be a boost to the tax filers. The new law has expanded the standard deduction from $6,500 to $12,000 for single filers and $13,000 to $24,000 for joint filers

The new tax law has also made some of the very important reforms to the Alternative Minimum Tax (AMT). This indicates that there will be lesser number of hours will be spent by the filers on Form 6251 and the AMT filing is expected to be reduced from 10 million to 1 million and less number of people will have AMT liability