On December 22, 2017, the Tax Cuts and Jobs Act (Pub L 115-97, 131 Stat 2054) was enacted. Among other things, the Act:
- Lowers the corporate income tax rate permanently from a maximum 35 percent to 21 percent.
- Lowers individual tax rates and adjusts brackets, while increasing standard deductions and eliminating personal exemptions.
- Creates a new deduction for individual taxpayers for 20 percent of qualified business income from pass-through entities: partnerships, S corporations, or limited liability companies.
- Eliminates the Alternative Minimum Tax for corporations and reduces its effect on individuals.
- Eliminates the deferral of taxation on exchanges of property other than real property.
- Eliminates or caps many itemized deductions, including state and local taxes, mortgage interest, and casualty losses.
- Provides new schemes for depreciation of residential and non-residential real property and expensing of certain types of business expenditures.
- Increases the estate and gift tax applicable exclusion amount and GST exemption from $5 million ($5,600,000 as adjusted for inflation in 2018) to $10 million ($11,200,000 in 2018).
Many of the individual and business tax changes are temporary and sunset after the 2025 tax year.