Top 3 Tax Law Changes & Legislation of The Last 5 Years
There have been several significant tax law changes in the past five years that have had a major impact on individuals and businesses. In this blog post, we’ll be looking at the top three tax law changes and legislation of the last five years: the Tax Cuts and Jobs Act of 2017, the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, and the Consolidated Appropriations Act, 2021.
- Tax Cuts and Jobs Act of 2017: This legislation made significant changes to the tax code, including reducing the corporate tax rate, increasing the standard deduction for individual taxpayers, and changing the way that certain business income is taxed.
- Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020: This legislation provided relief for individuals and businesses affected by the COVID-19 pandemic, including provisions for unemployment benefits, small business loans, and deferment of certain taxes.
- Consolidated Appropriations Act, 2021: This legislation provided further relief for individuals and businesses affected by the COVID-19 pandemic, including additional unemployment benefits and a second round of stimulus payments. It also extended certain tax credits and deductions that had expired at the end of 2020.
It’s important to note that tax laws are subject to change, and it’s always a good idea to stay up to date on the latest developments.
Tax Cuts and Jobs Act of 2017 (TCJA)
The Tax Cuts and Jobs Act of 2017 (TCJA) was a significant piece of tax legislation that was signed into law by President Donald Trump in December 2017. The TCJA made a number of changes to the tax code, including reducing the corporate tax rate from 35% to 21%, increasing the standard deduction for individual taxpayers, and changing the way that certain business income is taxed.
One of the key provisions of the TCJA was the reduction of the corporate tax rate. The new rate of 21% was a significant decrease from the previous rate of 35%, and it was intended to make the United States a more competitive place to do business. The TCJA also made changes to the way that pass-through businesses, such as sole proprietorships and partnerships, are taxed. These businesses are now eligible for a 20% deduction on their business income, which can significantly reduce their tax burden.
In addition to these changes, the TCJA also made significant changes to the individual tax code. It nearly doubled the standard deduction for individual taxpayers, which means that more people will be able to take the standard deduction rather than itemizing their deductions. The TCJA also made changes to the tax brackets and the tax rates that apply to different income levels. As a result of these changes, many taxpayers saw a decrease in their tax liability in 2018 and beyond.
Overall, the Tax Cuts and Jobs Act of 2017 was a significant overhaul of the tax code that made a number of changes to both corporate and individual taxes. While the law has been controversial, these tax law changes have generally been seen as a win for businesses, as have made the United States a more competitive place to do business and has reduced the tax burden for many companies.
Coronavirus Aid, Relief, and Economic Security (CARES) Act
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was a comprehensive piece of legislation that was signed into law in March 2020 in response to the economic impact of the COVID-19 pandemic. The CARES Act provided relief for individuals and businesses affected by the pandemic, including provisions for unemployment benefits, small business loans, and deferment of certain taxes.
One of the key provisions of the CARES Act was the expansion of unemployment benefits. The law provided an additional $600 per week in federal unemployment assistance for those who were out of work due to the pandemic, and it extended benefits to gig workers and other self-employed individuals who were not previously eligible for unemployment benefits. The CARES Act also established the Pandemic Unemployment Assistance (PUA) program, which provided assistance to workers who were not eligible for regular unemployment benefits, such as independent contractors and part-time workers.
In addition to these provisions, the CARES Act also provided financial assistance to small businesses through the Paycheck Protection Program (PPP). The PPP provided forgivable loans to small businesses to help them cover the cost of payroll and other expenses during the pandemic. The CARES Act also established the Economic Injury Disaster Loan (EIDL) program, which provided low-interest loans to small businesses that were experiencing economic hardship due to the pandemic.
Overall, the CARES Act was one of the most significant tax law changes that provided much-needed financial assistance to individuals and businesses affected by the COVID-19 pandemic. These tax law changes have been credited with helping to stabilize the economy and prevent further damage during a time of crisis.
Learn More about the CARES Act on it’s wikipedia page.
Consolidated Appropriations Act, 2021 (CAA)
The Consolidated Appropriations Act, 2021 (CAA) was a comprehensive piece of legislation that was signed into law in December 2020. The CAA provided further relief for individuals and businesses affected by the COVID-19 pandemic, including additional unemployment benefits and a second round of stimulus payments. It also extended certain tax credits and deductions that had expired at the end of 2020.
One of the key provisions of the CAA was the extension of unemployment benefits. The law provided an additional $300 per week in federal unemployment assistance for those who were out of work due to the pandemic, and it extended the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs, which had been established under the CARES Act. The CAA also provided a second round of stimulus payments to eligible individuals, with amounts ranging from $600 to $1,200 depending on income level.
In addition to these provisions, the CAA also extended several tax credits and deductions that had expired at the end of 2020. The tax law changes included the ability to claim the Child and Dependent Care Credit, the Earned Income Tax Credit, and the Education and Tuition Tax Credits. The CAA also extended the charitable contribution deduction, which allows taxpayers to claim a deduction for donations made to qualified charitable organizations.
Overall, the Consolidated Appropriations Act of 2021 was a significant piece of legislation that provided further relief to individuals and businesses affected by the COVID-19 pandemic. These tax law changes have been credited with helping to stabilize the economy and provide support to those who were struggling during a difficult time.
Summing Up 5 Years Of Tax Law Changes
In conclusion, the past five years have seen a number of significant changes to tax law that have had a significant impact on individuals and businesses. The Tax Cuts and Jobs Act of 2017 made major changes to the corporate tax rate and the way that certain business income is taxed, while the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 provided financial assistance to individuals and businesses affected by the COVID-19 pandemic.
Finally, the Consolidated Appropriations Act of 2021 extended unemployment benefits and provided a second round of stimulus payments, as well as extended several tax credits and deductions that had expired at the end of 2020. These three pieces of legislation have all had a significant impact on the way that taxes are administered in the United States and will continue to shape the tax landscape for years to come.
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