The Tax Cuts and Jobs Act rewrote large parts of the federal tax code in a single stroke: lower individual brackets, a doubled standard deduction, capped state-and-local deductions, and a new deduction for pass-through business income. Some households kept thousands more each year. Others — particularly in high-tax states — found themselves worse off.
Who came out ahead
Corporations saw the headline change, with the federal rate falling to a flat 21%. Families with children benefited from the expanded child credit, and owners of pass-through businesses could deduct up to a fifth of qualified income, subject to limits that rewarded careful planning.
The law did not simply cut taxes — it moved them. Planning became the difference between paying more and paying less.
Who felt the squeeze
The $10,000 cap on state and local tax deductions hit itemizers in high-tax states hardest. Unreimbursed employee expenses disappeared, and personal exemptions went away entirely — a real cost for larger families that the child credit did not always offset.
What our clients did
Harborview clients bunched deductions into alternate years, revisited entity choice for their businesses, and re-timed charitable gifts to years when itemizing still paid. The lesson endures through every later reform: read the law early, model your own numbers, and act before year end.
Discuss this with an advisor
Every tax situation is personal — bring us yours.
