The Tax Cuts and Jobs Act of 2017 is the most sweeping tax reform legislation in decades. It was signed into law by President Donald Trump in December 2017 and is set to take effect in 2018. The new tax code will affect individuals, businesses, and the economy as a whole.
For individuals, the new tax code will reduce the number of tax brackets from seven to four, with the top rate dropping from 39.6% to 37%. The standard deduction will nearly double, from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples filing jointly. The personal exemption has been eliminated, but the child tax credit has been increased from $1,000 to $2,000.
For businesses, the new tax code will reduce the corporate tax rate from 35% to 21%. It will also allow businesses to immediately write off the full cost of new equipment and other investments. This will make it easier for businesses to invest in new technology and equipment, which could lead to increased productivity and economic growth.
The new tax code will also affect the economy as a whole. The lower corporate tax rate could lead to more investment in the U.S. economy, which could lead to more jobs and higher wages. The increased standard deduction and child tax credit could also put more money in the pockets of consumers, which could lead to increased consumer spending and economic growth.
Overall, the new tax code could have a positive effect on the economy. However, it is important to remember that the effects of the new tax code will vary depending on individual circumstances. It is important to consult a tax professional to determine how the new tax code will affect you.