Intuit Academy Tax Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

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Question: 1 / 145

What major change was enacted by the Tax Cuts and Jobs Act?

Introduction of new tax brackets

Increase in personal exemptions

Reduction of corporate tax rates

The major change enacted by the Tax Cuts and Jobs Act was the reduction of corporate tax rates. This legislation, effective from 2018, significantly lowered the corporate tax rate from 35% to a flat 21%. This reduction was intended to make the U.S. tax system more competitive globally and to incentivize business investment within the country. This move aimed to stimulate economic growth by providing corporations with more capital to reinvest in their operations.

Other options reflect aspects of tax law changes, but they do not represent the primary transformation brought about by the Tax Cuts and Jobs Act. For example, while new tax brackets were introduced, they were part of broader changes rather than a singular focus of the act. Similarly, the personal exemption was eliminated instead of increased, which contrasts with one of the options given. Education credits were modified, but eliminating them would not accurately describe the adjustments made by the act. Thus, the reduction in corporate tax rates stands out as the most significant and pivotal change resulting from the Tax Cuts and Jobs Act.

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Elimination of education credits

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