What does the tax bill mean for you?

The House passes the Republican tax plan.

Much of the news surrounding Congress’ new tax bill has focused on politics — but what does it mean for you as a taxpayer?

In condensed form, here are some of the changes and how they’ll affect the consumer’s wallet. Congress is expected to vote on the measure in coming days.


New tax brackets

The bill would make changes to tax brackets and lower rates. For example, the top rate would drop to 37 percent, from 39.6 percent.


Most taxpayers would likely see a little more money in their February paychecks as a result of those changing brackets, though the bill would also eliminate personal exemptions, said Jeremy Scott, vice president of editorial at Tax Analysts, a nonprofit, nonpartisan publisher on tax policy and practice.

Standard deduction

The standard deduction would rise for individuals, from $6,350 to $13,000, and for couples, from $12,700 to $24,000.

That means many people may no longer want to itemize deductions if those itemized deductions aren’t as high as the new standard deductions, Scott said.


Child tax credit

Families making up to $400,000 would receive a $2,000 tax credit per child, up from $1,000. Families would receive the credit regardless of whether they itemize or take the standard deduction.

That credit would apply to any federal income taxes a family owes, or, if a family doesn’t owe any federal income taxes, it could receive refunds of up to $1,400 per child from the government, said Geoff Harlow, a tax partner at Kessler Orlean Silver and Co. in Deerfield, Ill.

Property tax deductions

The new bill would limit to $10,000 the amount of state and local taxes, including property taxes, that can be deducted annually.

Mortgage interest

People who bought their homes before Dec. 15 would still be able to deduct interest on mortgage debt of up to $1 million. Those who bought homes later, however, would see that amount lowered to $750,000.

Medical expenses

Currently, people can deduct medical expenses if those expenses exceed 10 percent of their adjusted gross income. The proposal lowers that threshold to 7.5 percent.


For couples who divorce or separate after Dec. 31, 2018, anyone who pays alimony no longer will be able to deduct the payments.

Moving expenses

The costs of moving for a job (except in the military) would no longer be tax-deductible.

529 plans

People would be able to use money saved in 529 savings plans not just for college but also to pay for attendance at public, private or religious elementary and secondary schools.

Health insurance

The bill would erase the requirement that everyone buy health insurance or pay a penalty.

Twitter @lschencker

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