Tax reform is now real and as we expected in early November, the changes are fairly consequential.
Personal Income Tax Changes –
Generally lower tax brackets – There are still 7 brackets, albeit with slightly lower rates.
An increase in the child tax credit to $2,000 (refundable up to $1,400), beginning to phase out after income levels of $400,000 for marrieds filing joint and $200,000 for all other taxpayers.
Alimony – Treatment is reversed from prior law treatment and now the payor may not deduct alimony paid and the income is not reportable to the recipient.
Gain Exclusion on Disposition of the Primary Residence – These changes were not included in the final legislation.