Suspension of personal exemption deduction. —The deduction for personal and dependency exemptions by an individual taxpayer is temporarily repealed for tax years beginning after December 31, 2017, and before January 1, 2026 (Code Sec. 151(d)(5), as added by the Tax Cuts and Jobs).

When did tax laws change in 2018?

Congress has passed the largest piece of tax reform legislation in more than three decades. The bill went into place on January 1, 2018, which means that it will affect the taxes of most taxpayers for the 2019 tax year.

What was suspended for tax year 2020?

Estimated tax payments for 2020 normally due on April 15, 2020 and June 15, 2020 are treated as timely if made by July 15, 2020. The deduction for all personal exemptions is suspended (reduced to zero), effective for tax years 2018 through 2025. For 2020, the gross income limitation for a qualifying relative is $4,300.

What did TCJA eliminate?

The TCJA eliminated deductions for unreimbursed employee expenses, tax preparation fees, and other miscellaneous deductions. It also eliminated the deduction for theft and personal casualty losses, although taxpayers can still claim a deduction for certain casualty losses occurring in federally declared disaster areas.

How does the TCJA affect itemized deductions?

Before the tax reform bill took effect, about 30% of taxpayers itemized deductions on Schedule A, instead of taking the standard deduction associated with their filing status. However, the TCJA has a large impact on itemized deductions, as several itemized deductions have been eliminated or modified.

What is the maximum child tax credit under the TCJA?

Under the TCJA, personal and dependent exemptions are eliminated from 2018 through 2025. Starting in 2018, the TCJA increases the maximum child tax credit from $1,000 to $2,000 per qualifying child.

How does the TCJA affect an ABLE account?

ABLE accounts and rollovers from a 529 plan. The TCJA increases the amount of contributions allowed to an ABLE account and adds special rules for the increased contribution limit. It also allows an ABLE account’s designated beneficiary to claim the Saver’s Credit for contributions to the account.

When does the tax cuts and Jobs Act take effect?

Most changes from the Tax Cuts and Jobs Act took effect on January 1, 2018 and are slated to sunset after December 31, 2025. However, there are a few provisions from the new tax law that have a 2019 effective date and some are retroactive. Tax Brackets and Tax Rates Change for Most Taxpayers With the TCJA