2018 TCJA Federal Tax Changes

• Personal Property Tax & State/Local Taxes (SALT) – Limited to $10,000 of combined property, state, local, and sales taxes
• Standard Deduction – $12,000 Individual; $18,000 Head of Household; $24,000 for joint filers
• Individual Tax Rates & Brackets – Same number of brackets (7), but each one is lower percentage by 1-4%
• Qualified Pass-Through Income Deduction – up to a 20% deduction for qualified Partnerships, S-Corp, and sole proprietorship income
• Individual Alternative Min. Tax (AMT) – Increased Exemption & Phase Outs
• Child Credits – $2,000 per qualifying child under 18 years old (phase out at $200,000 for individual filers and $400,000 for joint filers)
• Other Dependent Credit – New $500 credit for Other Dependents
• Healthcare Mandate – Repeals the penalty for Individual Mandate for 2019 year
• Medical Deductions – If you itemize, the deduction is allowed after 7.5% floor is reached, for all age groups
• Gift Tax Provision – $15,000 gift from each person
• Corporate Tax Rate – New provision set at 21% across the board
• Estate Tax Provision – Doubles exemption to $11,200,000 per person
• Personal Exemptions – Repealed
• Mortgage Interest – Deductible for new mortgages up to $750,000 on primary residence only. Reverts back to the $1,000,000 debt on new personal residences in 2026, but no provisions to return the tax break for second home mortgages
• Moving Expense Deduction – Repealed
• Alimony – Repealed for decrees settled after 2018. Prior divorces are not impacted.
• 2% Miscellaneous Deductions – Repealed
• Home Equity Loans – Repealed, until 2026 and allowed thereafter on debt up to $100,000; unless they are used for construction, improvement or purchase of primary residence
• Casualty Losses – Loss can be claimed only in the case of a disaster that is declared by the president. Provision expires after 2025
• Net Operating Loss Deduction – Deduction limited to 80% of taxable income for NOLs arising in 2018 & forward
• Roth IRA Re-Characterization – Repealed