Tax Reform Provisions that Affect Individuals As the IRS implements this major tax legislation, check this page for updates and resources to learn how the Tax Cuts and Jobs Act (TCJA) affects individual taxpayers. See also Publication 5307, Tax Reform: Basics for Individuals and Families. Be Tax Ready Do a Paycheck Checkup to see if you’re withholding the right amount of tax from your paychecks. Too little could mean an unexpected tax bill or penalty. Find out about tax reform changes that affect individuals and families. Withholding Withholding Estimator The IRS encourages several key groups of taxpayers to perform a “paycheck checkup” to check if they are having their employer withhold the right amount of tax for their situation, following recent tax-law changes. It’s especially important for certain people, to check their withholding. They are people who: Belong to a two-income family. Work two or more jobs or only work for part of the year. Have children and claim credits such as the Child Tax Credit. Have older dependents, including children age 17 or older. Itemized deductions on their 2017 tax returns. Earn high incomes and have more complex tax returns. Received large tax refunds or had large tax bills for 2017. Resources: Paycheck Checkup Tax Withholding FAQs: Withholding Estimator Frequently Asked Questions, Estimated Taxes for Individuals FAQs Tax Reform Tax Tips: Tax Tip 2020-118, Tax Reform Tax Tip 2018-45, Tax Reform Tax Tip 2018-46, Tax Reform Tax Tip 2018-47, Tax Reform Tax Tip 2018-154, Tax Reform Tax Tip 2018-164, Tax Reform Tax Tip 2019-73, Tax Reform Tax Tip 2019-74, Tax Reform Tax Tip 2019-75, Tax Reform Tax Tip 2019-76, Tax Reform Tax Tip 2019-81, Tax Reform Tax Tip 2019-106, Tax Reform Tax Tip 2019-108, Tax Reform Tax Tip 2019-109, Tax Reform Tax Tip 2019-111, Tax Reform Tax Tip 2019-112, Tax Reform Tax Tip 2019-127, COVID Tax Tip 2020-101, COVID Tax Tip 2020-117, COVID Tax Tip 2020-159, Tax Tip 2021-04 News Releases: IR-2019-178, IR-2019-163. IR-2019-139, IR-2019-112, IR-2018-36, IR-2018-179, IR-2018-180, IR-2018-255, IR-2019-03, IR-2019-37, IR-2019-55, IR-2019-56, IR-2019-60, IR-2019-61, IR-2019-62, IR-2019-64, IR-2019-65, IR-2019-69. IR-2019-81, IR-2019-88, IR-2019-91, IR-2019-107, IR-2019-108, IR-2019-110, IR-2019-111, IR-2019-144, IR-2019-149, IR-2019-152, IR-2019-211, IR-2020-09, IR-2020-28, IR-2020-53, IR-2020-205, IR-2020-207, IR-2020-232, IR-2020-256, IR-2020-263 Tax info to Share: Have questions about the Tax Withholding Estimator? Check out the FAQs An estimated tax payment could help avoid a penalty Alternate ways to get your withholding right Ways to check your withholding on IRS.gov Check your withholding ASAP Tips for using the IRS Tax Withholding Estimator If you’re self-employed, checking your tax situation just got easier Retirees: New IRS tool makes it easier to check your withholding What to do with your Tax Withholding Estimator results New Tax Withholding Estimator makes it easier to tailor your withholding What you need to know about doing a Paycheck Checkup Notices: Notice 2019-11 PDF, Notice 2019-25 PDF NPRM – REG – 132741-17 Fact Sheets: FS-2019-4, FS-2019-6 YouTube videos: Tax Withholding Estimator English | Spanish | ASL Part Time and Seasonal Jobs English | ASL Form W-4, Employee's Withholding Allowance Certificate A new version of Form W-4 is available to help taxpayers check their 2018 tax withholding following passage of the TCJA. If changes to withholding should be made, the Withholding Estimator gives employees the information they need to fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Employees will submit the completed W-4 to their employer. Resources: Paycheck Checkup IRS Statement on Form W-4 News Releases: IR-2019-112, IR-2019-37, IR-2019-62, IR-2019-98, IR-2019-108, IR-2019-110, IR-2019-111, IR-2019-149, IR-2020-09, IR-2020-28, IR-2020-53, IR-2020-223 Tax Tips: Tax Reform Tax Tip 2019-74, Tax Reform Tax Tip 2019-76, Tax Reform Tax Tip 2019-106, Tax Reform Tax Tip 2019-109, Tax Reform Tax Tip 2019-112, Tax Tip 2020-109 Fact Sheets: FS-2019-4, FS-2019-6 NPRM–REG–132741-17 Treasury Decisions: TD 9920, TD 9924 Forms: Draft of the 2020 Form W-4, Employee's Withholding Allowance Certificate PDF Frequently Asked Questions: FAQs on the early release of the 2020 Form W-4 YouTube videos: Do I Need to Fill Out a New W-4? English | Spanish Paycheck Checkup Taxpayers are encouraged to do a “paycheck checkup.” to make sure they have the right amount of tax taken out of their paychecks for their personal situation. Resources: Paycheck Checkup Tax reform resources News Releases: IR-2019-163, IR-2019-139, IR-2019-112, IR-2018-220, IR-2019-37, IR-2019-55, IR-2019-56, IR-2019-60, IR-2019-61, IR-2019-62, IR-2019-64, IR-2019-65, IR-2019-69, IR-2019-80, IR-2019-81, IR-2019-88, IR-2019-91, IR-2019-97, IR-2019-98, IR-2019-99, IR-2019-105, IR-2019-107, IR-2019-108, IR-2019-111, IR-2019-144, IR-2019-149, IR-2019-152, IR-2020-28, IR-2020-53, IR-2020-207 Tax Tips: Tax Reform Tax Tip 2019-45, Tax Reform Tax Tip 2019-73, Tax Reform Tax Tip 2019-74, Tax Reform Tax Tip 2019-76, Tax Reform Tax Tip 2019-81, Tax Reform Tax Tip 2019-106, Tax Reform Tax Tip 2019-108, Tax Reform Tax Tip 2019-109, Tax Reform Tax Tip 2019-111,Tax Reform Tax Tip 2019-112 Fact Sheets: FS-2019-4, FS-2019-6 Frequently Asked Questions: FAQs on the early release of the 2020 Form W-4 Tax Info to Share: Alternate ways to get your withholding right Ways to check your withholding on IRS.gov Check your withholding ASAP What you need to know about doing a Paycheck Checkup Forms: Draft of the 2020 Form W-4, Employee's Withholding Allowance Certificate PDF Notice 2019-25 PDF Regulations: NPRM–REG–132741-17, NPRM-REG-100320-20 Withholding Tables New withholding tables reflect changes in tax rates and tax brackets, the increased standard deduction and the repeal of personal exemptions, among other things. The new withholding tables are designed to work with the Forms W-4 that workers have already filed with their employers to claim withholding allowances. This will minimize burden on taxpayers and employers. Employees do not have to do anything at this time. Credits Child Tax Credit and Additional Child Tax Credit For 2018, the maximum credit has increased and the income threshold at which the credit begins to phase out has increased. Each child must have a Social Security number before the due date of your 2018 return (including extensions) to be claimed as a qualifying child for the child tax credit or additional child tax credit. Resources: Notice 2018-70 PDF IR-2018-79 Tax Tips: Tax Reform Tax Tip 2019-140, Tax Reform Tax Tip 2018-182, Tax Reform Tax Tip 2019-15, Tax Reform Tax Tip 2019-27, Tax Reform Tax Tip 2019-35, Tax Reform Tax Tip 2019-99 Credit for Other Dependents A new credit of up to $500 may be available for each dependent who does not qualify for the child tax credit. Resources: Tax Tips: Tax Reform Tax Tip 2019-140, Tax Reform Tax Tip 2019-27, Tax Reform Tax Tip 2019-35 Notice 2018-70 PDF IR-2018-79 NPRM-REG-118997-19, Dependent Defined; Notice of Proposed Rulemaking and Partial Withdrawal of Notice of proposed rulemaking Deductions Personal Exemption Deduction Eliminated Personal exemption deductions for yourself, your spouse, or your dependents have been eliminated beginning after December 31, 2017, and before January 1, 2026. Resources: Tax Tips: Tax Reform Tax Tip 2019-140, Tax Reform Tax Tip 2019-27, Tax Reform Tax Tip 2019-35 Notice 2018-84 PDF IR-2018-222 RP-2018-57 PDF NPRM-REG-124810-19 Treasury Decisions: TD 9912 , TD 9913 PDF Standard Deduction Amount Increased For 2018, the standard deduction amount has nearly doubled for all filers. Resources: Tax Tips: Tax Reform Tax Tip 2019-140, Tax Reform Tax Tip 2019-27, Tax Reform Tax Tip 2019-99 IR-2018-222 RP-2018-57 PDF Itemized Deductions Deduction for personal casualty and theft losses suspended (unless incurred in federally-declared disaster area) Limitations to the deduction for state and local taxes Limitations to the deduction for home mortgage interest in certain cases Eliminating most miscellaneous itemized deductions such as: Deductions for employee business expenses Tax preparation fees Investment expenses, including investment management fees Employment related educational expenses Job search expenses Hobby losses Safe deposit box fees Investment expenses from pass-through entities Eliminated the limitation on itemized deductions for certain high-income taxpayers. Resources: News Releases: IR-2017-210, IR-2018-32, IR-2018-122, IR-2018-127, IR-2018-222, IR-2018-230, IR-2019-183, IR-2020-90, IR-2020-217 Tax Tips: Tax Reform Tax Tip 2019-140, Tax Reform Tax Tip 2019-27, Tax Reform Tax Tip 2019-28, IRS Tax Reform Tax Tip 2019-67, Tax Reform Tax Tip 2019-99, Tax Reform Tax Tip 2019-100, Tax Reform Tax Tip 2019-102 Notice 2018-63 PDF RP-2018-57 PDF NPRM-REG-118295-18 TD 9918 YouTube Videos: Mortgage Interest Deduction - English | Spanish | ASL SALT – State and Local Income Tax The deductibility of state and local tax payments for federal income tax purposes is now limited to $10,000 a calendar year. A taxpayer who makes payments or transfers property to an entity eligible to receive tax deductible contributions must reduce their charitable deduction by the amount of any state or local tax credit the taxpayer receives or expects to receive. Resources: Rev. Proc. 2019-12 PDF News Releases: IR-2017-210, IR-2018-122, IR-2018-172, IR-2018-178, IR-2019-59, IR-2019-109 Tax Tips: Tax Reform Tax Tip 2019-140, Tax Reform Tax Tip 2019-28, Tax Reform Tax Tip 2019-102 Regulations: REG-112176-18, NPRM-REG-107431-19 SALT FAQ Notices: Notice 2018-54 PDF, Notice 2019-12 PDF Rev. Rul. 2019-11 PDF Treasury Decisions: TD 9864, TD 9907 Moving Expenses No Longer Deductible The deduction for moving expenses has been suspended for most taxpayers for tax years beginning after Dec. 31, 2017 through Jan. 1, 2026. This suspension does not apply to members of the Armed Forces of the United States on active duty who move pursuant to a military order related to a permanent change of station. However, employers may exclude from wages any 2018 reimbursements to or payments on behalf of employees for moving expenses incurred for a move that took place prior to January 1, 2018, and which would have been deductible had they been paid prior to that date. See Notice 2018-75 for more information. Resources: News Releases: IR-2018-127, IR-2018-251, IR-2019-183 Notice 2018-75 PDF Tax Reform Tax Tip 2018-192 YouTube videos: Moving Expenses - English | Spanish | ASL Depreciation and Expensing Some laws regarding depreciation deductions have changed. A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. The new law increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million. Resources: FS-2018-9 Alimony Alimony and separate maintenance payments are no longer deductible for any agreement executed or modified after December 31, 2018. Resources: PDF Tax Tips: Tax Reform Tax Tip 2019-88 Notices: Notice 2018-37 PDF Attorney's Fees – Sexual Harassment or Sexual Abuse claims The FAQ below addresses the deductibility of attorney’s fees related to a settlement or payment when the settlement or payment is related to a sexual harassment or sexual abuse claim and is subject to a nondisclosure agreement. Resources: Section 162(q) FAQ U.S. Armed Forces members Combat Zone Benefits U.S. Armed Forces members who served in the Sinai Peninsula of Egypt may qualify for combat zone tax benefits retroactive to June 2015. Resources: IR-2018-95 Moving Expenses Members of the Armed Forces on active duty are still able to deduct their moving expenses. From 2018 through 2025, most taxpayers can no longer deduct your moving expenses unless they are a member of the Armed Forces on active duty. Resources: IR-2018-127, IR-2019-183 YouTube videos: Moving Expenses - English | Spanish | ASL Savings Plans Retirement The Tax Cuts and Jobs Act made several changes to retirement plans. Resources: Publication 590-B PDF FAQs: IRA FAQS, Retirement Plans FAQs regarding loans IR-2018-19 Notice 2018-74 PDF NPRM-REG-116475-19 PDF TD-9937, Rollover Rules for Qualified Plan Loan Offset Amounts PDF ABLE Savings Accounts Tax law changes enable eligible people with Achieving a Better Life Experience (ABLE) accounts to put more money into their ABLE account and possibly qualify for the Saver's Credit. Resources: News Releases: IR-2018-139, IR-2018-239, IR-2020-227 REG-128246-18, Contribution Limits Applicable to ABLE Accounts TD 9923 Notice 2018-62 PDF Tax Reform Tax Tips: Tax Tip 2018-136, Tax Tip 2020-160 Drop-in Articles: People with disabilities can contribute more to ABLE accounts, and qualify for Saver’s Credit YouTube videos: ABLE Accounts - English | Spanish| ASL Health Savings Accounts A change in the inflation adjustment calculations for 2018 reduced the maximum deductible HSA contribution for taxpayers with family coverage under an HDHP by $50, to $6,850. Resources: Rev. Proc. 2018-27 PDF IR-2018-107 529 Education Savings Plan Changes Taxpayers, beneficiaries, and administrators of 529 and Achieving a Better Life Experience (ABLE) programs can rely on the rules described in Notice 2018-58 PDF until the Treasury Department and IRS issue regulations clarifying these changes. Resources: IR-2018-156 REG-128246-18, Contribution Limits Applicable to ABLE Accounts Notice 2018-58 PDF Publication 970 PDF Other Information Due Diligence for Tax Preparers IRS has issued final regulations expanding the long-standing paid preparer due diligence requirement to include individual income tax returns claiming the head of household filing status. Resources: IR-2018-216 Inflation Adjustments for Tax Year 2018 The tax year 2018 annual inflation adjustments have been updated to reflect changes from the TCJA. Resources: News Releases: IR-2018-94, IR-2018-222 Rev. Rul. 2018-11 PDF Rev. Proc. 2018-18 PDF RP-2018-57 PDF Tax on International Holdings The TCJA made several changes to the way income from foreign holdings are taxed. See International Taxpayers and Businesses for more information. Opportunity Zones Opportunity Zones are an economic development tool—that is, they are designed to spur economic development and job creation in distressed communities. Opportunity Zones are designed to spur economic development by providing tax benefits to investors. Resources: Comparison of changes to opportunity zones under TCJA Opportunity Zones Frequently Asked Questions Notice 2018-48 PDF Rev. Proc. 2018-16 PDF News Releases: IR-2018-206, IR-2019-75, IR-2019-212, IR-2020-274 Rev. Rul. 2018-29 PDF Regulations: REG. 115420-18 PDF, REG-115420-18 (updated), PDF REG-120186-18, PDFREG-120-186-18 NPRM PDF TD 9889 Tax law creates new opportunity zone program Tax Reform Tax Tip 2018-191 Wrongful IRS Levy Individuals and businesses have additional time to file an administrative claim or to bring a civil action for wrongful levy or seizure. The TCJA extended the time limit for filing an administrative claim and for bringing a suit for wrongful levy from nine months to two years. Resources: IR-2018-126 Filing a Wrongful Levy Claim IRS Tax Reform Tax Tip 2018-123 Estate and Gift Tax The TCJA temporarily increased the basic exclusion amount from $5 million to $10 million for tax years 2018 through 2025, with both dollar amounts adjusted for inflation. Resources: IR-2018-229, IR-2019-189 Estate and Gift Tax Frequently Asked Questions REG-106706-18 TD 9884 Taxpayer Advocate Service The Taxpayer Advocate Service’s also offers a Tax Reform Changes website, available in English and Spanish, that explains what is changing and what is not this year for individuals. Its interactive information can be reviewed by tax topic or line by line using a 2017 Form 1040 in addition to references to the newly published 2018 Form 1040. Both methods include scenarios to describe how the new law may affect you. You can also sign up to receive email notifications as the website is updated with new tax law information.