TCJA Tax Cuts

Extracted Attributes

• Common Name

  Trump Tax Cuts

• Abbreviation

  TCJA

• Amended Code

  Internal Revenue Code of 1986

• Official Name

  Tax Cuts and Jobs Act

• Legislation Type

  Budget reconciliation law

• Impact on Median Wages

  Smaller than expected and modest

• Child Tax Credit Increase

  From $1,000 to $2,000 (with $1,400 refundable)

• Impact on Economic Growth

  Smaller than expected and modest

• Impact on Wealth Distribution

  Disproportionately benefited the most affluent

• ACA Individual Mandate Penalty

  Reduced to $0

• Corporate Income Tax Rate Change

  Reduced from 35% to 21%

• Section 179 Expensing Cap Increase

  From $500,000 to $1 million

• Individual Top Marginal Tax Rate Change

  Reduced from 39.6% to 37%

• Corporate Investment Increase (Estimated)

  11%

• Long-run GDP Increase (due to permanence)

  1.1%

• Child Tax Credit Income Threshold Increase

  From $110,000 to $400,000

• State and Local Tax (SALT) Deduction Limit

  $10,000 annually

• Revenue Loss Offset (due to long-run GDP increase)

  $710 billion (16% of revenue losses)

• Standard Deduction Increase (Single, Tax Year 2020)

  From $6,500 to $12,400

• Standard Deduction Increase (Married, Tax Year 2020)

  From $9,550 to $24,800

• Projected Deficit Increase (due to permanence, 10 years)

  $4.6 trillion

Timeline

• Legislation introduced in Congress as the Tax Cuts and Jobs Act. (Source: Web Search)

  2017

• Temporary 100% expensing for business property acquired and placed in service begins. (Source: Web Search)

  2017-09-27

• Signed into law (Pub. L. 115–97). (Source: Wikipedia)

  2017-12-22

• Most changes introduced by the bill went into effect. (Source: Wikipedia)

  2018-01-01

• Affordable Care Act's (ACA) individual mandate penalty tax set to $0. (Source: Web Search)

  2019

• 100% expensing allowance for business property begins to decrease by 20% per year. (Source: Web Search)

  2023-01-01

• Individual income tax cut provisions originally scheduled to expire. (Source: Summary)

  2025

• Congress passed the 'One Big Beautiful Bill Act', extending most TCJA provisions beyond their original expiration dates. (Source: Summary)

  2025

• Temporary 100% expensing for business property expires. (Source: Web Search)

  2027-01-01

• Many business tax cut provisions originally scheduled to expire. (Source: Summary)

  2028

Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act, Pub. L. 115–97 (text) (PDF), is a budget reconciliation law that amended the Internal Revenue Code of 1986. The legislation is commonly referred to in media as the Trump Tax Cuts. Major elements of the changes include reducing tax rates for corporations and individuals, increasing the standard deduction and family tax credits, eliminating personal exemptions and making it less beneficial to itemize deductions, limiting deductions for state and local income taxes and property taxes, further limiting the mortgage interest deduction, reducing the alternative minimum tax for individuals and eliminating it for corporations, doubling the estate tax exemption, and reducing the penalty for violating the individual mandate of the Affordable Care Act (ACA) to $0. The New York Times has described the TCJA as "the most sweeping tax overhaul in decades". Most of the changes introduced by the bill went into effect on January 1, 2018, and did not affect 2017 taxes. Many tax cut provisions contained in the TCJA, notably including individual income tax cuts, such as the changes to the standard deduction in §63 of the IRC, were scheduled to expire in 2025 while many of the business tax cuts were set to expire in 2028. However, in 2025, Congress passed the One Big Beautiful Bill Act, which extends most provisions of the TCJA beyond their original expiration dates. Extending the cuts have caused economists across the political spectrum to worry it would boost inflationary pressures and worsen America's fiscal trajectory. The Congressional Budget Office estimates that extending the expiring provisions would add $4.6 trillion in deficits over 10 years. Studies show the TCJA increased the federal debt, as well as after-tax incomes disproportionately for the most affluent. It led to an estimated 11% increase in corporate investment, but its effects on economic growth and median wages were smaller than expected and modest at best.

Web Search Results

• Tax Cuts and Jobs Act (TCJA) | TaxEDU Glossary

  The TCJA lowered the corporate income tax (CIT) rate from 35 to 21 percent starting in 2018. The measure also allows full and immediate expensing of short-lived capital investments for five years and increases the section 179 expensing cap from $500,000 to $1 million. The bill eliminated or curtailed a variety of business taxes and expenditures, including the deductibility of net interest, net operating loss carrybacks and carryforwards, and the corporate alternative minimum tax (AMT). [...] The TCJA lowered most individual income tax rates, including the top marginal rate from 39.6 to 37 percent. The law maintained the seven-bracket rate structure, but the income thresholds were updated. TCJA increased the standard deduction to $12,400 for single filers and $24,800 for married filers (tax year 2020), compared with $6,500 (single) and $9,550 (married) under prior law. The bill eliminated the personal exemption and a variety of other miscellaneous deductions along with limiting [...] certain itemized deductions like the state and local tax (SALT) deduction, mortgage interest deduction (MID), and charitable contribution deduction. TCJA increased the Child Tax Credit (CTC) from $1,000 to $2,000—the first $1,400 of which is refundable—and increased the income thresholds from $110,000 to $400,000.

• Tax Cuts and Jobs Act - Wikipedia

  The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,( L.115–97 (text)(PDF), is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs Act (TCJA),( that amended the Internal Revenue Code of 1986. The legislation is commonly referred to in media as the Trump tax cuts. Major elements of the changes include reducing tax rates for corporations and individuals, increasing [...] Single filers (2018)( Under previous law | Under TCJA | | --- | --- | | Rate | Income bracket | Rate | Income bracket | | 10% | $0–$9,525 | 10% | $0–$9,525 | | 15% | $9,525–$38,700 | 12% | $9,525–$38,700 | | 25% | $38,700–$93,700 | 22% | $38,700–$82,500 | | 28% | $93,700–$195,450 | 24% | $82,500–$157,500 | | 33% | $195,450–$424,950 | 32% | $157,500–$200,000 | | 35% | $424,950–$426,700 | 35% | $200,000–$500,000 | | 39.6% | $426,700 and up | 37% | $500,000 and up | [...] Married filing jointly (2018)( Under previous law | Under TCJA | | --- | --- | | Rate | Income bracket | Rate | Income bracket | | 10% | $0–$19,050 | 10% | $0–$19,050 | | 15% | $19,050–$77,400 | 12% | $19,050–$77,400 | | 25% | $77,400–$156,150 | 22% | $77,400–$165,000 | | 28% | $156,150–$237,950 | 24% | $165,000–$315,000 | | 33% | $237,950–$424,950 | 32% | $315,000–$400,000 | | 35% | $424,950–$480,050 | 35% | $400,000–$600,000 | | 39.6% | $480,050 and up | 37% | $600,000 and up |

• Budget Reconciliation: Tracking the 2025 Trump Tax Cuts

  The 2017 Trump Tax Cuts, known as the Tax Cuts and Jobs Act (TCJA), reduced average tax burdens for taxpayers across the income spectrum and temporarily simplified the tax filing process through structural reforms. It also boosted capital investment by reforming the corporate tax system and significantly improved the international tax system. [...] Over the 2025 through 2034 budget window, permanence for the expiring TCJA individual provisions will reduce federal tax revenue by $3.6 trillion ($3.2 trillion dynamically), the expiring estate tax provisions by $240 billion ($240 billion dynamically), and the expiring business provisions by $648 billion ($351 billion dynamically). Long-run GDP would be 1.1 percent higher, offsetting $710 billion, or 16 percent, of the revenue losses. [...] Extending the expiring 2017 TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Cuts and Jobs Act (TCJA) would decrease federal tax revenue by $4.5 trillion from 2025 through 2034. Long-run GDP would be 1.1 percent higher, offsetting $710 billion, or 16 percent, of the revenue losses. Long-run GNP (a measure of American incomes) would only

• Tax Cuts and Jobs Act: A comparison for businesses - IRS

  production period. | TCJA temporarily allows 100% expensing for business property acquired and placed in service after Sept. 27, 2017 and before Jan. 1, 2023. The 100% allowance generally decreases by 20% per year in taxable years beginning after 2022 and expires Jan. 1, 2027. The law now allows expensing for certain film, television, and live theatrical productions, and used qualified property with certain restrictions. For more information, see Tax Reform: Changes to Depreciation Affect [...] The Tax Cuts and Jobs Act ("TCJA") changed deductions, depreciation, expensing, tax credits and other tax items that affect businesses. This side-by-side comparison can help businesses understand the changes and plan accordingly. Some provisions of the TCJA that affect individual taxpayers can also affect business taxes. Businesses and self-employed individuals should review tax reform changes for individuals and determine how these provisions work with their business situation.

• How did the Tax Cuts and Jobs Act change personal taxes?

  TCJA retained the preferential tax rates on long-term capital gains and qualified dividends and the 3.8 percent net investment income tax (NIIT). The NIIT applies to interest, dividends, short- and long-term capital gains, rents and royalties, and passive business income. TCJA separated the tax-rate thresholds for capital gains and dividend income from the tax brackets for ordinary income for taxpayers with higher incomes (table 4). [...] Starting in 2019, TCJA set the Affordable Care Act’s (ACA’s) individual mandate penalty tax to zero. Previously, households without qualifying health insurance were required to pay a penalty equal to the lesser of 2.5 percent of household income or $695 per adult and $347.50 per child, up to a maximum of $2,085. Under the TCJA, individuals who do not enroll in adequate health insurance plans will not face a penalty starting in 2019. Because fewer people obtain free or subsidized coverage in the [...] TCJA changed the structure of several major itemized deductions. Under prior law, itemizers could claim deductions for all state and local property taxes and the greater of their state and local income or sales taxes (subject to overall limits on itemized deductions). TCJA limited the itemized deduction for total state and local taxes to $10,000 annually, for both single and joint filers, and did not index that limit for inflation. As under prior law, taxpayers cannot claim a deduction for