Tax cuts and jobs act additions. Many aspects of the Tax Cuts and Jobs Act have been changed, or modified, prior to the actual implementation of the final bill, that what was discussed in the Presidential Campaign’s, then after the election of President Trump, varied from the final bill. Here are a few changes that might impact a large number of tax payers. Tax cuts and jobs act additions. Some states have even filed lawsuits, alleging multiple parts of the Tax Cuts and Jobs Act hurt them disproportionately compared to other states.
Taxpayers that have kids, or other dependents will see changes to the Child Tax Credit. As under prior law, taxpayers can claim a child tax credit for each qualifying child under the age of 17. The new law doubles the amount of the credit from $1,000 to $2,000 per child. FOr higher income taxpayers, the new law also significantly raises the income levels at which the otherwise allowable credit is phased out. In the past, the total credit was reduced by $50 for each $1000 of income over $110,000 for joint filers. $75,000 for singles and heads of households, and $55,000 for married individuals filing separately. The new law, the reduction of the credit does not begin until income exceeds $400,000 on a joint return or $200,000 on all other returns.
The current alimony rule have been in place since the Revenue Act of 1942. Over 600,000 taxpayers have claimed a deduction for alimony on their tax returns. Under the Tax Cuts and Jobs Act divorces entered into after 2018 are no longer deductible by the payor or taxable income by the recipient. The Tax Cuts and Jobs Act treatment of alimony payments will apply to payments that are required under divorce or separate instruments that are executed after December 31st, 2018, or modified after that date. There is no change in the federal income tax treatment of divorce related payments that are required by divorce related payments that are required after 2019.