Skip to main content
U.S. flag

An official website of the United States government

Dot gov

The .gov means it’s official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

SSL

This site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Español

Tax Reform

The new tax reform law made changes that affect every taxpayer. They apply to your 2018 federal income taxes. These were due in April unless you got an extension. Then they're due October 15, 2019 in most cases. It’s best to review the changes that impact you and your family before you complete your return.

Infographic: Tax Reform - Big Changes to Credits and Deductions for 2018

Learn the changes that affect you and your family under the tax reform law.

Infographic about the tax reform law's big changes to credits and deductions. View a larger version of the infographic.

Infographic about the tax reform law's big changes to credits and deductions.
  • The new tax law increases the standard deduction and child tax credit and eliminates or reduces other deductions.

    The law nearly doubles the standard deduction for most filers.

    {Deductions lower the amount of income that you pay tax on.}

    • Standard deduction is now $12,000 for individuals, $18,000 for heads of household, and $24,000 for married couples filing jointly.

    • If you used to itemize deductions, it may no longer be worth it. Your standard deduction may be more than your total itemized deductions now.

    The maximum Child Tax Credit has doubled to $2,000.

    {Tax credits reduce your tax bill dollar-for-dollar.}

    • More families will qualify as income limits increase to $200,000 for individual filers and $400,000 for married filing jointly.

    • Even if you don’t owe any tax, you can still get refunded up to $1,400 per child when you claim the child tax credit on your return.  

    There’s a new $500 credit for other dependents.

    Claim it for your children age 17 and older, including college students, and other qualifying relatives in your household.

    Many itemized deductions have changed.

    If you do itemize, check for new rules in each category. These are just a few.

    • The total deduction for state and local income, sales, and property taxes is now limited to $10,000.

    • Interest on a home equity loan is now deductible only if you use the money to build or renovate your home.   

    • Moving expenses, tax preparation fees, and job expenses are no longer deductible for most filers.

    The personal and dependent exemptions have been eliminated.

    {These exemptions lowered your taxable income, just as deductions do.}

    The increases in the standard deduction and the child tax credit may help offset the loss of the personal and dependent exemptions.

    Learn more about the changes and how they’ll affect you at irs.gov/tax-reform.

New 2018 Tax Rates and Brackets

The Tax Cuts and Jobs Act of 2017 keeps the number of tax rates at seven but lowers most of them. The top rate is now 37%, down from 39.6% last year. The tax brackets, or income ranges, have shifted slightly too.

You can find your new tax rate in the 2018 tax brackets table. To see how much it's changed under tax reform, compare it to your rate in the 2017 table below.

2018 Tax Rates and Brackets

Rate Single Married, Filing Separately Married, Filing Jointly Head of Household
Taxable income over...
10% $0 $0 $0 $0
12% $9,525 $9,525 $19,050 $13,600
22% $38,700 $38,700 $77,400 $51,800
24% $82,500 $82,500 $165,000 $82,500
32% $157,500 $157,500 $315,000 $157,500
35% $200,000 $200,000 $400,000 $200,000
37% $500,000 $300,000 $600,000 $500,000

2017 Tax Rates and Brackets

Rate Single Married, Filing Separately Married, Filing Jointly Head of Household
Taxable income over...
10% $0 $0 $0 $0
15% $9,325 $9,325 $18,650 $13,350
25% $37,950 $37,950 $75,900 $50,800
28% $91,900 $76,550 $153,100 $131,200
33% $191,650 $116,675 $233,350 $212,500
35% $416,700 $208,350 $416,700 $416,700
39.6% $418,400 $235,350 $470,700 $444,550

Tax Reform: Big Changes for 2018

The Tax Cuts and Jobs Act made big changes to how the government calculates your income taxes. These changes apply to your 2018 federal tax return, which was due in April. If you received a filing extension, it's due October 15, 2019, in most cases. 

Filing Federal Income Taxes May Be Easier Under New Tax Law

The new law may simplify filing and reduce taxes for many people. It

  • Lowers tax rates

  • Increases the standard deduction

  • Doubles the child tax credit

  • Creates a new “other dependents” credit

Or, depending on your situation, the new law may make your tax bill the same or higher than last year. It

  • Eliminates the personal and dependent exemptions

  • Limits or eliminates many itemized deductions

The Internal Revenue Service (IRS) expects that most people will pay less tax for 2018 than they did for 2017.

Tax Rates Go Down

There are still seven tax rates, but most of them have gone down. The top tax rate is now 37%, down from 39.6% last year. Compare the 2018 and 2017 tax rates and brackets to see where you fall.

Standard Deduction Grows

The law nearly doubles the standard deduction for most filers. The standard deduction for 2018 is

  • $12,000 for individuals

  • $18,000 for heads of household

  • $24,000 for married couples filing jointly

Standard Deduction Versus Itemizing

Deductions lower the amount of income that you pay tax on. You can take the standard deduction or you can itemize deductions. Your standard deduction may now be greater than your total itemized deductions. Learn how to decide to take the standard deduction or to itemize.

Personal and Dependent Exemptions Are Eliminated

Last year, you could take exemptions of $4,050 each for yourself, your spouse, and your dependents. These exemptions lowered your taxable income. Even though personal exemptions are no longer available, the higher standard deduction and increases in other credits may help offset their loss.

Child Tax Credit Doubles to $2,000

Tax credits are better than deductions because they reduce your tax bill dollar-for-dollar. The Child Tax Credit now reduces your taxes up to $2,000 per child under 17. Many more families will qualify for the credit as income limits have gone up to

  • $200,000 for individual filers, compared to $75,000 last year

  • $400,000 for married filing jointly, compared to $110,000 last year

This is a “refundable” credit, meaning you can get up to $1,400 per child back even if your 2018 tax bill is $0. You must claim the credit on your tax return to get it.

Social Security Number Now Required for Child Tax Credit

Any child you claim for the Child Tax Credit must now have a Social Security number. They must have the number by the due date of your tax return (including extensions).

New $500 Credit for Other Dependents

You can now claim a credit for your other dependents, including kids 17 and up and other relatives. To qualify, a dependent must be a U.S. citizen, U.S. national, or U.S. resident alien.

Many Itemized Deductions Have Been Eliminated or Capped

These are many of the changes. If you itemize, check for new rules in each category.

  • State and Local Taxes

    • Deductions for state and local taxes are now limited to $10,000 combined. This includes income, sales, and property (including real estate) taxes.

  • Home Ownership

    • Home equity loan interest is now deductible only if you use the money to build or renovate your home.  

    • Mortgage interest deductions on homes bought in 2018 have a new, lower limit. You can deduct interest on mortgages up to $750,000 for homes bought after December 15, 2017. The limit on homes bought on or before that date remains at $1,000,000.

  • Moving

    • You can no longer deduct moving expenses. The exception to this rule is for active duty military members who are moving due to a change in duty station.

  • Personal Casualty and Theft Losses

    • You can deduct personal casualty and theft losses only if they are related to a federally declared disaster. Each claim must include the FEMA code assigned to the disaster.

  • Charitable Contributions

    • The deduction for charitable donations has gone up. You can now deduct cash contributions of up to 60% of your adjusted gross income. Before 2018, it was 50%.

  • Medical and Dental Expenses

    • For 2018 only, you can deduct unreimbursed medical and dental expenses that exceed 7.5% of your adjusted gross income. Before, expenses had to exceed 10%. For 2019, this amount returns to 10% of your adjusted gross income.

  • Miscellaneous Itemized Expenses eliminated include

    • Employee business expenses

    • Investment expenses from pass-through entities

    • Safe deposit box fees

    • Hobby losses

    • Job search expenses

    • Employment-related educational expenses

    • Investment expenses, including investment management fees

    • Tax preparation fees

Learn more about the tax law changes with Tax Reform: Basics for Individuals and Families. For specific questions, try out the Interactive Tax Assistant.

Share This Page:
Facebook Twitter Email

Do you need help?

Ask us any question about the U.S. government for free. We'll get you the answer or tell you where to find it.

Last Updated: September 5, 2019

Top