Cutting red tape has been a core tenet of the Trump Administration’s economic policies. The Tax Cuts and Jobs Act protects important benefits for both American families and businesses, while simplifying our tax code for the benefit of all taxpayers. While the Act includes $5.5 trillion in gross tax cuts, it also includes $4 trillion in reforms, including eliminating special-interest loopholes.
Families will be able to file taxes on a postcard-sized return.
- As the standard deduction is increased, fewer Americans will need to itemize, reducing the filing burden for tens of millions of families.
The mortgage interest deduction is being retained for newly-purchased homes of up to $750,000, while remaining intact for existing homes.
- Other important deductions maintained include the state and local tax deduction up to $10,000.
- The charitable giving deduction remains intact.
Many other vital tax benefits have been retained, including:
- The threshold for deducting medical expenses is reduced from 10% of AGI to 7.5% of AGI (the pre-Obamacare level) in 2017 and 2018, making it easier to claim the deduction
- Earned Income Tax Credit for low-income workers
- Child and Dependent Care tax credit
- Deduction for teacher out-of-pocket classroom expenses
- Retirement savings tax benefits
- Adoption expense tax credit
- Capital gains exclusion on home sales
- Tax-Free municipal bonds
- Private activity bonds
Tax reform is reducing the burden of red tape on all Americans, while continuing to safeguard important tax benefits that both families and businesses depend on.