It is unlikely that changes in the tax code would affect tax returns that must be filed this year, which cover last year’s income and deductions. The real estate industry has lobbied strenuously to retain the interest and real estate tax deductions, which are important for many homeowners. Tax credits are more valuable to taxpayers than deductions, because credits are subtracted from the tax that is owed, not from the income on which that tax is based. This penalty, part of the Affordable Care Act, is not really an income tax, but it is reported on tax returns and many people think of it as one. This isn’t really an income tax, either, although the amount paid appears on the standard W-2 income statements that employers fill out.

Source: New York Times February 16, 2017 21:26 UTC