At 1097 pages, the TCJA (Tax Cuts & Job Act) is the most far-reaching and complex tax code passed by Congress since 1986.
529 College Savings Plans just got more appealing—529 Accounts were previously only available to students in college. Now they can be used to help pay for Private K-12 tuition ($10,000 per year). The majority of states are making these distributions tax free. Please check with your advisor or tax professional to get the details for the state where your 529 Plan is held. Another change to 529 College Savings Plans is that they are now able to be used to benefit children with special needs through the use of Adults Achieving a Better Life (ABLE) accounts.
The TCJA will supposedly push more tax payers to take the standard deduction because they have increased the standard deduction to $12,000 for individual and $24,000 for married couples. Due to this increase, a strategy called “bunching” is back in style. Speak with your tax professional to learn more and see if bunching might be a strategy that would benefit your tax situation.
Alimony is no longer deductible for the payer nor is it considered income to the payee for agreements executed after 2018.
You may want to contact your estate planning attorney to see if anything in your Will or Trust needs to be updated due to the changes in the unified estate and gift tax exemptions.
With lower tax rates for many people, ROTH conversions or partial ROTH conversions are still a great opportunity in many cases.
Many of the provisions within the TCJA will sunset in 2025. The government needs to make attempts to pay down or trim the national deficit so more changes are coming to be sure.