{"id":329,"date":"2026-07-09T06:16:00","date_gmt":"2026-07-09T06:16:00","guid":{"rendered":"https:\/\/www.e-file.com\/info\/?p=329"},"modified":"2026-07-29T05:11:36","modified_gmt":"2026-07-29T05:11:36","slug":"the-2018-tax-reform-bill-known-as-the-tax-cuts-and-jobs-act","status":"publish","type":"post","link":"https:\/\/www.e-file.com\/info\/the-2018-tax-reform-bill-known-as-the-tax-cuts-and-jobs-act\/","title":{"rendered":"The 2018 Tax Reform Bill (Known as the “Tax Cuts and Jobs Act”), Updated for 2026"},"content":{"rendered":"

The Tax Cuts and Jobs Act (TCJA) was signed into law in December 2017 and represented the most sweeping overhaul of the U.S. tax code since 1986. Most of its individual income tax provisions were designed as temporary measures set to expire at the end of 2025. The One Big Beautiful Bill Act, signed in 2025, permanently extended the majority of them while modifying several and adding new provisions. What follows is a provision-by-provision look at what the original reform changed, and where each provision stands today.<\/span><\/p>\n

The following is a quick introduction to the tax changes that may impact you (updated for 2026) as a result of the Tax Cuts and Jobs Act. This list is by no means exhaustive, but it will help you get your bearings on this bill and its current status.<\/span><\/p>\n

SALT<\/span><\/h2>\n

SALT is an acronym for “state and local taxes” and relates to a filer’s ability when itemizing deductions to deduct state income taxes and\/or sales taxes. In the past, there wasn’t any limitation on the deduction of state and local taxes (and for residents living in states with notoriously high taxes like California and New York, this was a significant advantage). The TCJA retains the SALT deduction but capped the total deductible at $10,000, including income, sales and property taxes.<\/span><\/p>\n

The One Big Beautiful Bill Act raised the SALT cap to $40,000 for tax years 2025 through 2029, after which it reverts to $10,000. Residents of high-tax states who itemize will see a meaningful increase in what they can deduct during this window.<\/span><\/p>\n

Homeowner Considerations<\/span><\/h2>\n

One of the most debated deductions in this tax reform bill was the mortgage deduction. Here’s where things currently stand:<\/span><\/p>\n

The IRS had allowed homeowners who itemize deductions to deduct the interest they pay on a first and\/or second residence; up to $1 million in original mortgage principal. The TCJA reduced the maximum to $750,000 in original mortgage principal for mortgages taken out after December 15, 2017. Mortgages originated on or before that date remain subject to the $1 million limit. The One Big Beautiful Bill Act permanently extended this $750,000 limit.<\/span><\/p>\n

Taxpayers were also allowed to deduct interest paid on home equity debt, up to $100,000. The TCJA eliminated this deduction for debt not used to buy, build, or substantially improve the home. That remains the case under current law.<\/span><\/p>\n

Medical Expenses<\/span><\/h2>\n

Medical expenses are one of the most frequently used deductions. Before this tax reform bill, a deduction was permitted for unreimbursed medical expenses that exceeded 10% of your adjusted gross income. The TCJA lowered that percentage to 7.5% of your adjusted gross income, and the One Big Beautiful Bill Act made this 7.5% threshold permanent.<\/span><\/p>\n

Charitable Donations<\/span><\/h2>\n

Under the prior tax law, provided you itemized your deductions, you could deduct up to half of your income in eligible charitable donations, making it a popular deduction for people from all walks of life. The TCJA raised that limit to 60% of your income for cash donations to public charities, incentivizing charitable giving. This provision was permanently extended under the One Big Beautiful Bill Act.<\/span><\/p>\n

Note that under the One Big Beautiful Bill Act, taxpayers who take the standard deduction can now also deduct up to $1,000 in cash charitable donations ($2,000 for married filing jointly) without itemizing, a new benefit that didn’t exist under the original TCJA.<\/span><\/p>\n

Estate Taxes<\/span><\/h2>\n

This is one of the changes that won’t apply to most people but which managed to get a lot of press. Inherited money and property incurs tax. Before the TCJA, heirs were taxed at a rate of 40% on any inherited property valued at over $5.49 million. The TCJA doubled the exemption to $11.18 million per individual, and the One Big Beautiful Bill Act permanently extended the higher exemption. For 2025, the exemption is approximately $13.99 million per individual, adjusted for inflation annually. Married couples can effectively combine their exemptions.<\/span><\/p>\n

Pass-Through Business Income<\/span><\/h2>\n

The TCJA introduced a deduction of up to 20% of qualified business income for owners of pass-through entities, sole proprietorships, partnerships, S corporations, and LLCs. This was one of the most significant business tax changes for self-employed individuals and small business owners. Income and business-type limitations apply. The One Big Beautiful Bill Act permanently extended this deduction, which was otherwise set to expire at the end of 2025. Additional detail on how this deduction applies to your situation can be found on the IRS website – <\/span>here<\/span><\/a>.<\/span><\/p>\n

Like most things in life, the tax changes introduced by the TCJA are a mixed bag, but knowing what you’re dealing with will ensure that change, something that tends to be hard for just about everybody, can better be taken in stride toward a favorable outcome. With the One Big Beautiful Bill Act now in place, most of these provisions are permanent, giving taxpayers more certainty in their long-term planning.<\/span><\/p>\n

Note: Tax laws may change with little notice. We do our best to keep this information current, but it is provided on an \u201cAS IS\u201d basis.\u00a0It is should not be considered, legal, financial, or other professional guidance.\u00a0For more, see our terms.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

The Tax Cuts and Jobs Act reshaped individual deductions, business income rules, estate taxes, and other major parts of the tax code. This updated 2026 guide explains where those provisions stand now after the One Big Beautiful Bill Act.<\/p>\n

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