Read the article and answer these questions

1. What does Tax Cuts and Jobs Act mean?

2. What does Tax bill changes depend on?

3. How does Tax Bill affect if you have your own home?

4. What is the situation for taxpayers if they want to buy or sell their home?

5. Can you give any examples of new changes beginning with the 2018 tax year in Tax Bill? What are they about?

 (*GOP = Grand Old Party -a name for the Republican Party)

On Friday, December 22, 2017, President Donald Trump signed the massive tax bill. Formerly known as the Tax Cuts and Jobs Act – so-named because it cuts individual, corporate and estate tax rates, and the lower corporate tax rates are said to be a precursor to job creation.  

The final bill is more than 500 pages – and the title gives a whiff of how the text reads. The ultimate effect on Americans and the economy remains to be seen. But some effects are clear already.

 The changes involve so many parts of the tax code that how the tax bill affects you depends on your personal situation — how many children you have, how much you pay in mortgage interest and state/local taxes, how much you earn from work.

You Own a Home

If you live in a high-tax area, you will be especially affected by the new $10,000 limit on how much state and local tax (including property taxes) you can deduct from your federal income taxes.  

Your current mortgage-interest deductions won't be affected, but if you move, that will change.

You're Buying (or Selling) One

Under current law, homeowners can deduct the interest on a mortgage of up to $1,000,000, or $500,000 for married taxpayers filing separately. Now, anyone who takes out a mortgage between December 15, 2017, and December 31, 2025, can only deduct interest on a mortgage of up to $750,000, or $375,000 for married taxpayers filing separately.

  Taxpayers who continue to itemize need to be aware of changes beginning with the 2018 tax year.

• Casualty and Theft Losses. These are no longer tax deductible unless they are related to a loss in a federally declared disaster area – think hurricane, flood and wildfire victims.

• Medical Expenses. The threshold for deducting medical expenses temporarily goes back to 7.5% from 10%, and that change applies to 2017 taxes, unlike the bill’s other changes, which mostly don’t kick in until 2018. But the change only applies through 2019. After that, the 10% threshold returns. This change particularly helps those with low incomes and high medical expenses. 

• State and local taxes. Taxpayers can deduct a maximum of $10,000 from the total of their state and local income taxes or sales taxes, and their property taxes (added together), a measure that might hurt itemizers in high-tax states such as California, New York and New Jersey. The $10,000 cap applies whether you are single or married filing jointly; if you are married filing separately, it drops to $5,000.

 

By Amy Fontinelle | Updated February 14, 2018

INVESTOPEDIA

 

https://www.investopedia.com/taxes/how-gop-tax-bill-affects-you/?utm_source=personalized&utm_campaign=www.investopedia.com&utm_term=12160023&utm_medium=email

Taxes throughout Russian history