Tax Law Changes For The 2017 Year

  • Tax Law Changes for 2018 Tax Year:

    • The personal exemption is no longer available.
    • Child Tax Credit is being doubled and phase out thresholds have been significantly raised.
    • IRA and ROTH deductions remain $5,500 and $6,500 for those over age 50.
    • The standard mileage rate for business travel is 54.5 cents. Medical mileage is 18 cents. The charitable rate remains at 14 cents per mile.
    • The deduction for Mortgage Insurance premiums has again been extended. This would apply only to new mortgages taken out after December 31, 2016
    • Student loan interest is still deductible up to a maximum of $2,500.00
    • The American Opportunity credit has been made permanent for the first 4 years of college, up to $2,500 per student. Lifetime learning credit per return is $2,000.
    • The Kiddie Tax is still in effect for children under age 19. If you have dependent children under 19 years old with interest and dividend income not in an education account, please bring that information
    • Capital Gains are not taxed again this year if your taxable income is less than $77,400 MFJ, $38,700 Single.
    • Moving expenses are no longer available.

    Standard Deduction:

    Single: $12,000                            Head of House: $18,000                                    MFJ: $24,000       

    Additional over 65 or blind:  $1,300 per person

    Schedule A – Itemized: No phase out on itemized deductions for taxpayers with high AGIs for 2018 to 2025.

    Medical: floor is 7.5% of AGI but for 2019 tax year and beyond it will be 10%

    Deductible taxes: property, sales, and state income but limited to $10,000 for MFJ, S, and HH. If you are MFS your limit is $5,000.

    Deductible Mortgage Interest: interest on loans up to $750,000 or ($375,000 for MFS) on loans contracted after December 14, 2017. (The $1 million limit still applies to loans contracted before Dec. 14. 2017 and closed by April 1 2018). Home Equity loan interest for improvements to home are deductible.

    Refinance mortgage loans – you can deduct the interest but only if the refinanced amount isn’t greater than your old loan balance.

    Casualty and Theft Losses: only deductible if you live in a federally declared disaster.

    Charity: Limit raised to 60% of AGI. No deduction for contributions to a college or university in exchange for athletic event seating rights.

    Miscellaneous expenses: All eliminated (tax, prep fees, investment advisory fees, unreimbursed work expenses, job search expenses, and investment expense).

    Gambling Losses: cannot exceed gambling winnings