Key tax reform changes 2018 taxes

Standard Deduction

  • Increased to $12,000 for single or married filing separately, $24,000 married filing jointly
  • Increased to $18,000 for Head of Household
  • 65 and over, blind, or disabled will get an additional standard deduction
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Families

  • Dependent exemption of $4,050 is eliminated
  • Child Tax Credit doubles to $2,000
  • Adds $500 credit for other types of dependent
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Home Mortgages

  • Mortgage interest paid on new loans deductible up to $750,000 (or existing loans up to $1,000,000)
  • Interest paid on home equity loan or home equity line is limited to building and improving your home
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Self-Employed

  • New 20% Qualified Business Income Deduction
  • Qualified business equipment can be deducted up to $1,000,000
  • Potentially a greater business auto depreciation deduction
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Healthcare

  • Eliminates tax penalty for not having health insurance (starting in 2019)
  • Lowers floor on out-of-pocket medical expenses to 7.5% for 2017 & 2018
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State & local taxes

  • State and local property, income, and sales taxes limited to $10,000
  • No income tax prepayment for 2019 allowed
  • More info