Cutting red tape has been a core tenet of the Trump Administration’s economic policies. While the Tax Cuts and Jobs Act includes $5.5 trillion in gross tax cuts, it also includes $4 trillion in reforms, including the elimination of special-interest loopholes and protection of important tax benefits. The Act also created the federal Opportunity Zones program, bringing jobs and investment to America’s most distressed communities.
It is now easier for families to file taxes.
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
Opportunity Zones are spurring economic development and job creation for America’s most in-need communities.
Opportunity Zones are located in economically distressed communities designated by the chief executives of every U.S. state and territory.
Under the Tax Cuts and Jobs Act, investors are offered capital gains tax relief for new investments into these Zones.
8,761 distressed communities in all 50 states, D.C. and five U.S. territories have been designated as Opportunity Zones, encompassing nearly 35 million Americans.
These communities demonstrate average poverty rates of 32 % – compared with the U.S. average rate of 17 % – unemployment rates 1.6 times higher than the average U.S. census tract, and median family incomes averaging 37% below the state median.
By providing businesses and investors with the opportunity to bring jobs and development into distressed neighborhoods, more Americans will share in our economic success than ever before.
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. Incentivizing private investment into low-income communities will foster economic revitalization, job creation and promote sustainable economic growth across the nation.