2018 Taxes – Changes you should know about….

Financing

1.      The Standard Deduction – The standard deduction for married filing jointly increases to $24,000; $12,000 for single taxpayers; and $18,000 for heads of households.  The increased deduction ends after 2025.

2.     Personal Exemptions – the personal exemption is eliminated.  The exemption returns after 2025.

3.     State and Local Tax Deductions – The SALT deduction is capped at $10,000.  The deduction limit ends at after 2025.

4.     Mortgage Deduction – the deductible limit drops to $750,000for new debt incurred beginning 2018.  Also, homeowners may not claim a deduction for existing and new interest on home equity debt beginning January 1, 2018.  The mortgage deduction changes expire after 2025.

5.     Medical Expense Deductions – you can deduct medical expenses that exceed 7.5% of your adjusted gross income in 2017 and 2018.  New deduction level ends January 1, 2019.

6.     Itemized Deductions – are repealed through 2025.

7.     Pass Through Business Taxes – Business owners can take a 20% deduction on their pass through business income, with limits on those earning above $157,500 (single) and $315,000 (married).

8.     Individual Alternative Minimum Tax – the AMT exemption increases to $70,300 for single filers and $109,400 for joint filers and phases out for tax payers at $500,000 and $1 million respectively.  These changes end after 2025.

9.     Estate Tax – the top rate of 40% applies to estates valued at more than $11.2 million ($22.4 million for couples).  The increased levels expire after 2025.

10.  Child Tax Credit – The tax credit is increasing from $1000 to $2000 per qualifying child effective this year.  Also, the income thresholds are increased to $200,000 for single filers and $400,000 for married filing jointly.