Forms 1040EZ and 1040A are eliminated!!!
The 1040 is a "postcard"
Schedule 1 - Various types of income and above the line deductions (adjustments to income)
Schedule 2 - AMT
Schedule 3 - Nonrefundable credits other than child tax credit
Schedule 4 - Other taxes, such as self employment tax
Schedule 5 - Other payments and refundable credits other than earned income credit, additional child tax credit, and the American Opportunity Credit
Schedule 6 - Reporting a foreign address if you have one or identifying a third party designee
Exemptions: Zero for 2018 - Zero for 2019
Std Deduction: $24,000/$18,000/$12,000 for 2018 (plus $1,300 if 65 or over or blind if married/$1,600 if unmarried)
$24,400/$18,350/$12,200 for 2019 (plus $1,300 if 65 or over or blind for married taxpayers and $1,650 if unmarried)
Std Business Mileage Rate - Can be used for businesses with four or fewer vehicles
54.5 cents/mile for 2018
58 cents/mile for 2019
Charitable Mileage: 14 cents/mile - no change
Medical & Moving Mileage
18 cents/mile for 2018
20 cents/mile for 2019
$13,810 for 2018 - $14,080 for 2019
Full credit available for special needs adoption even if costs are below credit amount
Phases out for AGI between $207,140 and $247,140
2018 - Campaign to Save Adoption Credit successful
401(k) Max-$18,500 for 2018 & $19,000 for 2019
50 or over? Add $6,000 for 2018 & 2019
SIMPLE Plans Max-$12,500 in 2018/$13,000 in 2019
50 or over? Add $3,000 for 2018 & 2019
IRA Traditional and Roth limit:
$5,500 for 2018 & $6,000 for 2019
Age 50 - 70? Add $1,000
2019 Phase Out for Roth Contributions $193,000 - $203,000 on joint returns and $122,000 - $137,000 for others
Max wages subject to social security increases from $128,400 in 2018 to $132,900 for 2019
Unified Estate tax exemption amount:
$11,180,000 for 2018
$11,400,000 for 2019
Top rate remains at 40%
Annual Gift Exclusion
$15,000 for 2018 & 2019
Not applicable to direct payment of tuition or medical expenses
Not applicable to gifts to spouse
For 2018, threshold for medical expenses is 7.5% of AGI. It goes to 10% for everyone in 2019.
Most provisions become effective for 2018
Reduce individual tax rates at almost every level
Maintain current 7 brackets for individuals
Standard deduction increases to $24,000 for joint filers, $12,000 for singles, and $18,000 for Head of Household
No more personal exemptions
Eliminated individual mandate effective in 2019
Reduced corporate income tax rates
New deduction for "pass through entities" taxed at individual level
Increase in amount exempt from estate tax
Repatriation of earnings that companies currently have held overseas
Increase Child Tax Credit
Reduce number of tax breaks
Section 179 1st Year Depreciation increased to $1,000,000 for 2018
Tax cuts for individuals and pass throughs expire after 2025
Taxpayers started to receive higher take home pay in February
The Bill will boost job creation, wages, and the economy
WHO WILL BENEFIT MOST
Tax Policy Center analysis shows that the biggest benefits will go to those making $308,000 to $733,000
Those making $733,000 can expect a $50,000 tax cut
New IRS Stats show that the top 1% of individual filers paid 37.32% of all Federal income tax in 2016
Top 5 % paid 58.23% of income tax/top 10% paid 69.47%
Bottom 50% of filers paid 3.04% of total federal income tax pd
Tax credit for each child under 17 increases from $1,000 to $2,000
Up to $1,400 may be refundable, meaning your refund may exceed your withholding
Income phase out increases from $110,000 to $400,000 for couples and from $75,000 to $200,000 for other filers
NEW: Nonrefundable credit of $500 for each dependent who is not a qualifying child - for example an adult parent or college age child or disabled adult child.
Amount of debt qualifying for deduction on home mortgage interest reduced from $1,000,000 to $750,000. This limit applies to mortgage debt incurred after December 15, 2017 to buy or improve a principal residence or second home.
Zillow estimates that only about 14% of homeowners (down from 44%) will claim the mortgage interest deduction for 2018
The new law BANS the deduction for interest on home equity loans. Interest accrued on home equity debt after 12/31/17 is not deductible.
No change in rules for the exclusion of gains from sale of your personal residence.
Effective with 2018, there is a $10,000 limit on the deduction for state and local taxes.
You can deduct any combination of state and local income or sales taxes or property taxes up to the $10,000 cap.
Schedule an appointment for a complete explanation of the new tax laws and see how they will affect you.