Tax bill changes

The Tax Cuts and Jobs Act will change tax specifics for many folks. Politicians are touting this bill as a winner while most polls show Americans are negative about it. Below are the particulars of the bill as I understand them at this time. 

The good.

·     A top individual tax rate of 37 percent. 

·     A top corporate rate of 21 percent.

·     Repeal of shared responsibility payments under the Affordable Care Act.

·     Enhanced refundability of the child tax credit, including an increase in the amount that's refundable up to 70% of the $2,000 limit.

·     Continued deductibility of student loan interest and exclusion from income of graduate student tuition waivers.

·     Reduced required recordkeeping. Doing away with the deduction for employee business expenses means that taxpayers who are not reimbursed for expenses by employers under an accountable plan will no longer need to keep track of business mileage and other expense during the year.

The bad.

·     Only interest on $750,000 of “acquisition debt”–money borrowed to buy, build or “substantially improve” a property-can be deducted on new mortgage loans initiated after December 15, 2017. For existing mortgages, the $1 Million limitation is “grandfathered”.

·     Home equity interest is no longer deductible. 

·     A maximum $10,000 deduction for state and local property taxes for individuals, with taxpayers being able to choose between deducting either property taxes or income taxes.

·     A lowered $750,000 limit on the loan amount for which a mortgage interest deduction can be claimed by individuals, with existing loans grandfathered.

·     Continued deductibility of unreimbursed medical expenses of individuals.

·     Retention of individual AMT with an exclusion of $1 million for joint filers and $500,000 for all others.