What Our Historic Tax Reform Means for You and Your Family | Speaker.gov

The Tax Cuts and Jobs Act is a bold, pro-growth bill that will overhaul our nation’s tax code for the first time since President Reagan’s historic tax reform 31 years ago. With this bill, a typical middle-income family of four, earning $59,000 (the median household income), will receive a $1,182 tax cut.

Most importantly—here’s what the Tax Cuts and Jobs Act means for you and your family:

You will be able to keep more of your hard-earned money every month.

  • The Tax Cuts and Jobs Act delivers tax relief to Americans of all walks of life.
  • It reduces the tax rates for low- and middle-income Americans, and roughly doubles the standard deduction—protecting up to $24,000 of your family’s take-home pay each year from taxes.
  • It also eliminates taxes that punish hardworking families, such as the Alternative Minimum Tax.

You will have help raising your children and supporting your family.

  • The Tax Cuts and Jobs Act delivers much-needed support to American families who today are struggling to keep up with the rising costs of child care, higher education, and looking after their loved ones.
  • The legislation takes action to support American families by:
    • Establishing a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses.
    • Preserving the Child and Dependent Care Tax Credit of $300 to help families care for their children and older dependents, such as a disabled grandparent who may need additional support.
    • It also helps families save for and better afford college tuition and other education expenses by streamlining today’s higher education benefits.

You will have an easier time filing your taxes each April.

  • The Tax Cuts and Jobs Act provides unprecedented simplicity and fairness by eliminating costly deductions that artificially drive up tax rates and add to layers of complexity to the tax code.
  • It ends the expensive and time-consuming nightmare that comes with tax-filing season so the vast majority of individuals and families will be able to file their taxes on a form as simple as a postcard.

You are going to have more job opportunities and see your paycheck grow after years of stagnant wages.

  • The Tax Cuts and Jobs Act lowers tax rates on businesses of all sizes so job creators can focus more on hiring workers, increasing paychecks, and investing in our local communities.
  • This tax relief will help Americans who have been struggling under today’s slow-growing economy find a job, earn a raise, and finally get ahead, instead of just getting by.

You will be able to more easily start your own small business and be your own boss.

  • With mind-numbing complexity and high tax rates, today’s broken tax code can often discourage entrepreneurs from starting a business, creating jobs, and investing in their local communities.
  • The Tax Cuts and Jobs Act reduces the tax rate on the hard-earned “pass-through” business income to no higher than 25 percent for Main Street job creators—the lowest tax rate on small business income since World War II.
  • Main Street job creators making below $100,000 each year will see the benefits of individual tax rate reductions just like all other Americans.
  • It also simplifies the tax code so Main Street job creators can focus more time and money on growing their business and investing in their workers—not on navigating the current 70,000 pages of tax laws.

You will see more “Made in America.”

  • With the highest corporate tax rate in the industrialized world, and an outdated international tax system that often taxes America’s global businesses twice, today’s broken tax code has forced many businesses to move their jobs, research, and headquarters overseas.
  • The Tax Cuts and Jobs Act will encourage American companies to bring their jobs and operations back home by lowering the corporate tax rate to 20 percent—the largest reduction in the U.S. corporate tax rate in our nation’s history.
  • It rewards work done in the United States by allowing businesses to fully and immediately deduct the cost of new capital equipment and promotes the development of cutting-edge “Made in America” products and services by retaining the Research & Development Tax Credit.
  • It modernizes our international tax system and encourages America’s global businesses to bring their foreign earnings home—so workers and job creators in the United States will once again have a competitive edge over other strong economies.

You and your family will be able to continue using the retirement savings option that best suits your needs at each stage of your lives.

  • The Tax Cuts and Jobs Act makes no changes to the popular retirement savings options that Americans have today—including 401(k)s and Individual Retirement Accounts, or IRAs. Americans will be able to continue making both traditional, pre-tax contributions and “Roth” contributions in the way that works best for them.
  • It also preserves lower rates on capital gains, dividends, and interest income so Americans can invest more in their local economies and build toward a more financially secure future for their families.