Tax reform is a hot topic in the United States right now, and it could have a major impact on your tax refund. The Tax Cuts and Jobs Act of 2017, which was signed into law in December 2017, made sweeping changes to the U.S. tax code. These changes could affect your tax refund in a variety of ways.
First, the new tax law nearly doubled the standard deduction. This means that more taxpayers will be able to take the standard deduction instead of itemizing their deductions. This could result in a larger tax refund for some taxpayers, as the standard deduction is higher than the total of itemized deductions for many taxpayers.
Second, the new tax law changed the tax brackets. The new tax brackets are lower than the old ones, meaning that some taxpayers may pay less in taxes. This could result in a larger tax refund for those taxpayers.
Third, the new tax law changed the rules for deductions. For example, the new law eliminated the personal exemption, which was a deduction of $4,050 per person. This could result in a smaller tax refund for some taxpayers.
Fourth, the new tax law changed the rules for itemized deductions. For example, the new law limits the amount of state and local taxes that can be deducted to $10,000. This could result in a smaller tax refund for some taxpayers.
Finally, the new tax law changed the rules for the Child Tax Credit. The new law increased the credit from $1,000 to $2,000 per child and made it available to more taxpayers. This could result in a larger tax refund for some taxpayers.
Overall, the new tax law could have a major impact on your tax refund. It is important to understand how the new law affects you so that you can maximize your tax refund. If you have any questions about how the new tax law affects your tax refund, it is best to consult a tax professional.