Permanent Provisions

These changes take effect for tax years beginning in 2018 unless otherwise noted: 

For Individuals

• No deductions for alimony payments required by post-2019 divorce agreements.
• No more reversals of Roth IRA conversions.
• Repeal of the penalty for failure to have “minimum essential coverage” under the Affordable Care Act for months beginning in 2019 and beyond.
• Tax-free distributions of up to $10,000 annually from Section 529 accounts to cover qualified K-12 school expenses at public, private or religious schools.
• Elimination of favorable treatment under Section 1031 for exchanges of personal property.
• No more charitable write-offs for a payment to a college if the payment entitles you to buy tickets to athletic events of the college.

For Businesses 

• Flat 21% federal income tax rate on corporations.

• Elimination of the corporate alternative minimum tax (AMT).
• More-generous rules for first-year Section 179 depreciation write-offs.
• More-generous depreciation deductions for passenger vehicles used for business (cars, light trucks and light vans).
• Faster depreciation for some real property and farming machinery and equipment.
• Expanded eligibility to use cash-method accounting and simplified inventory accounting procedures.
• Favorable accounting method change for eligible construction companies with long-term contracts.
• Elimination of favorable treatment under Section 1031 for exchanges of personal property.
• Reduced or eliminated deductions for business entertainment and some employee fringe benefits.
• Stricter rules on deducting net operating losses (NOLs).
• Several provisions affecting S corporations, partnerships, and LLCs treated as partnerships for tax purposes, excluding the new deduction of up to 20% of qualified business income (QBI).
• Self-created intangible assets no longer treated as capital gains assets. Applies to inventions; models and designs; secret formulas; and certain processes.
• New three-year holding period rule before long-term capital gains treatment is allowed for partnership carried interests.
• New $1 million annual limit on compensation deductions for amounts paid to principal executive officers.
• New requirement, for tax years beginning after Dec. 31, 2021, for specified R&D expenses to be capitalized and amortized over five years, or 15 years if the R&D is conducted outside the United States.

Temporary Provisions

These changes take effect for tax years beginning in 2018, and expire at the end of 2025, unless otherwise noted:

For Individuals

• Reduced federal income tax rates.
• More-favorable alternative minimum tax (AMT) rules.
• Expanded standard deductions.
• Increased child tax credit (up to $2,000 per qualifying child, with up to $1,400 that can be refundable), and higher income thresholds for the child credit phaseout.
• Credit of up to $500 for dependents who aren’t qualifying children. 
• Lower income threshold for itemized medical expense deductions (scheduled to expire at the end of 2018).
• Elimination of the phaseout rule that can reduce some itemized deductions for higher-income individuals.
• 60% adjusted-gross-income limit for itemized deductions for cash donations to public charities.
• Tax-free treatment for forgiven student loans due to death or disability.
• Increased federal gift and estate tax exemptions ($11.18 million or effectively $22.36 million for married couples for 2018).
• Deduction for up to 20% of qualified business income (QBI) from pass-through entities for noncorporate owners.
• Elimination of personal and dependent exemption deductions.
• Limitations on itemized deductions for home mortgage interest.
• Limitation on itemized deductions for state and local income and property taxes.
• Elimination of itemized deductions for miscellaneous expenses.
• Elimination of itemized deductions and tax-free employer reimbursements for moving expenses (except for certain military personnel).
• Elimination of itemized deductions for personal casualty and theft losses (except for losses incurred in federally declared disasters).
• Elimination of itemized deductions for hobby expenses.*
• Revised kiddie tax rate structure.*
• Stricter deduction rule for non-wagering expenses incurred by professional gamblers (such as for travel and lodging).
• Limitation on deducting large business losses recognized by individual taxpayers. 

  For Businesses

• 100% bonus depreciation for qualified business assets (expires after 2022).*

• Bonus depreciation with declining percentages for 2023 through 2026.*

• New tax credit for employer-paid family and medical leave for payments made in tax years beginning in 2018 and 2019.*