The tax cuts and jobs act for individuals.
The new tax law, commonly called the “Tax Cuts and Jobs Act,” is the biggest federal tax law change in over 30 years. Below are some significant changes affecting individuals.
Tax provisions that were eliminated:
? Personal exemption deductions are suspended.
? Phase-out of itemized deductions based on adjusted gross income (AGI) is suspended.
? Itemized deduction for home equity interest (other than acquisition debt) is no longer allowed.
? Itemized deduction for miscellaneous itemized deduc- tions subject to the 2% floor are no longer allowed. Ex- amples include investment expenses, unreimbursed employee business expenses, and tax preparation fees.
? Personal casualty loss and theft deductions are elimi- nated unless the loss is incurred in a federally de- clared disaster area.
? The moving expense deduction and income exclusion is allowed only to members of the Armed Forces (or their spouses or dependents).
? No charitable contribution deduction is allowed for a payment to a higher educational institution in ex- change for the right to purchase tickets or seating at an athletic event.
? Alimony is not deductible by the payer nor includible in income by the recipient for agreements entered into after December 31, 2018.
? Effective for 2019, the shared responsibility payment under the Affordable Care Act for not having mini- mum essential health insurance coverage is zero.
? The threshold for deducting medical expenses is 7.5% of AGI for all taxpayers for 2017 and 2018.
? The home mortgage interest deduction debt limit is reduced to $750,000 ($375,000 MFS) with certain exceptions.
? The itemized deduction for state and local taxes is limited to $10,000 ($5,000 MFS). (This limit includes both state and local income taxes and real property taxes.)
Tax provisions that were increased:
? The 2018 standard deduction is:
Single or Married Filing Separate........................................... $12,000
Married Filing Joint or Qualified Widow(er)............................. $24,000
Head of Household................................................................. $18,000
The following additional standard deduction applies for a taxpayer 65 or older or blind, per person, per event:
MFJ, QW, or MFS....................................................................... $1,300
Single or HOH............................................................................ $1,600
? The Child Tax Credit increased to $2,000 per qualify- ing child and the phase-out threshold increased.
? There is a new Family Tax Credit of up to $500 for de- pendents who are not a qualifying child for purposes of the Child Tax Credit.
? The 2018 alternative minimum tax (AMT) exemption and phase-out ranges are:
? For the charitable contribution deduction, the percent- age of AGI limitation for cash to public charities and certain other organizations increased from 50% to 60%.
? The estate and gift tax exemption amount increased to $11,180,000.