April 14, 2020 Section of Litigation

Effects of the Tax Cuts and Jobs Act on U.S. Taxpayers

An analysis of results showing general effects as well as specifically related to alimony.

By Stacey Udell

The Tax Cuts and Jobs Act (TCJA) has been highly politicized. This article presents analytical results about the effect of the TCJA on U.S. taxpayers—in a general sense and then specifically relating to alimony.

Taxpayers who used the standard deduction before the TCJA and continue to use it after its enactment should see a reduction in income taxes no matter their filing status or income level. More taxpayers should be able to use the standard deduction—largely due to the limits on the deductibility of state taxes. The $10,000 limitation on the deductibility of state taxes affects those living in states with higher real estate or income taxes (or both).

While many taxpayers have various sources of income, this article does not examine investment income, passive income, or capital gain income due to the additional considerations associated with these types of income. Also, all calculations herein are based on real estate taxes and mortgage interest of $8,000 each. 

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