Today’s broken tax code makes it too difficult for young Americans to plan for college, find good-paying jobs after graduation, and advance through their careers. Here are some of the many ways that the Tax Cuts and Jobs Act will help young Americans:
Aspiring and Current Students:
Whether you are in high school, college, or a vocational school, the Tax Cuts and Jobs Act helps students and their families by:
- Preserving and improving the American Opportunity Tax Credit to help students and families afford the various expenses of higher education and vocational school;
- Streamlining savings vehicles for education by adopting one set of simpler, enhanced “529 account” rules, allowing families to use 529 accounts to help afford rising school costs before college, providing more flexibility, and eliminating the need to save in two separate kinds of accounts; and
- Simplifying education tax benefits so that families and students can focus more time on preparing for the future instead of having to wade through roughly 100 pages of IRS instructions to understand which provisions are best for them.
Recent Graduates Entering the Workforce:
For recent graduates just starting out, the Tax Cuts and Jobs Act helps them keep more of their hard-earned money to spend on what matters most to them by:
- Roughly doubling the standard deduction to protect more of every paycheck from taxes;
- Lowering tax rates so young people can keep more of the money they earn in order to focus on things that matter to them, whether that is paying rent, paying off student loans, or going to a concert;
- Helping young entrepreneurs start their own business by providing a new, low 9% tax rate for the first $75,000 of business income earned by owners of pass-through businesses that earn less than $150,000; and
- Creating more job opportunities by closing special-interest loopholes and lowering the tax rates on businesses of all sizes so they can grow, hire more workers, and give young Americans a raise.
Young Professionals:
The Tax Cuts and Jobs Act will help young Americans as they advance through their careers and personal lives by:
- Establishing a new Family Credit as well as preserving the Adoption Tax Credit to help and support young Americans as they start a family;
- Encouraging homeownership by preserving a home mortgage deduction and continuing to allow individuals to write off the cost of state and local property taxes up to $10,000; and
- Protecting popular retirement savings options such as 401(k)s and Individual Retirement Accounts so young professionals can save for their futures.
Whether they are working toward a degree that helps advance their career, searching for a meaningful and good-paying job, starting a new business and creating jobs in their community, or buying a home and building a life for their family, the Tax Cuts and Jobs Act will help students, recent graduates, and young professionals at every step of their lives. With this historic legislation, young Americans will have a better opportunity to pursue their own version of the American Dream – whatever that may be.
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