Accounting 101: Impact of TCJA on Individual Tax Returns

This discussion post analyzes the impact of the Tax Cuts and Jobs Act (TCJA) on individual tax returns. The post identifies and explains two key tax rule changes: the new $10,000 cap on state and local tax (SALT) deductions, impacting homeowners in high-tax regions, and the revised mortgage interest deduction limits. It contrasts the previous rules with the new regulations, detailing the potential financial implications for taxpayers. Additionally, the post discusses the TCJA's provision regarding student loan debt discharge due to death or disability, highlighting the benefits and uncertainties surrounding its implementation, particularly concerning private lenders. The author also points out the need for further study of how this change affects taxpayers. The post references H&R Block's resources for understanding tax reform.

Table of Contents
TCJA.......................................................................................................................................................2
WE OWN A HOME:............................................................................................................................3
WE ARE BUYING OR SELLING A HOME:..............................................................................................3
STUDENT LOAN OF SPOUSE:..............................................................................................................3
REFERENCE:...........................................................................................................................................4

TCJA
1. List at least two new and/or revised tax rules included in the TCJA that you
believe will noticeably impact your individual tax return results for 2018 and
beyond. For each tax rule identified, describe in your own words the “old”
tax rule that used to apply and the “new” tax rule that is now in effect for
2018 and beyond. Briefly explain why you believe each tax law change is
anticipated to have a noticeable impact on your individual tax return. Note:
Please do not divulge any personal financial information in your discussion
post.
WE OWN A HOME:
If we reside in a region with elevated real estate taxes, we will be particularly impacted by the fresh
$10,000 cap on how much state and local duty (including real estate taxes) we can claim back from

our government revenue duties (exempt: duties paid or levied by doing company or company) ("Tax
Reform - 2018 Tax Law Changes | H&R Block", 2019).
Hypothecation interest deductions will not be impacted for the tax year 2018, but if we migrate, it
will alter. The standard deduction will rise from $6,350 to $12,000 for participants and married
couples filing individually, from $9,350 to $18,000 for household heads, and from $12,700 to
$24,000 for married couples reporting together. Also, households will not be able to deduct interest
on household-equity borrowing, whether they articulate it or not.
WE ARE BUYING OR SELLING A HOME:
Households could, under previous legislation, subtract interest on a lease of up to $1,000,000 or
$500,000 for individually filing married taxpayers. Now, anybody who picks up a lease between
December 15, 2017, and December 31, 2025, can subtract interest on a lease of up to $750,000 or
$375,000 for individually filing married taxpayers.
2. List at least one tax law concept included in the TCJA that you need to learn
more about, either because you don’t understand the rule or you’re unsure
how the rule will specifically impact your individual tax return.
STUDENT LOAN OF SPOUSE:
Between 2018 and 2025, federal and private student loans released from death or impairment will
not be levied. This shift will be a great benefit to households who are distressed. This particular
reform is still need to be studied as private lenders are still not required to discharge the debt. How
this impacts need to be studied as this is one of the main concerns for long time. Previously on
student loans, marginal tax rate were 25% which would owed by the heirs or survivors. The reform
eliminates the burden but private lenders have been spared. So, I feel we need to see how this plays
out.
REFERENCE:
Tax Reform - 2018 Tax Law Changes | H&R Block. (2019). Retrieved from
https://www.hrblock.com/tax-center/tax-reform/