Key Tax Reform Changes for 2018 Taxes

We understand that tax reform may be a lot to take in. Not to worry, we’ve gathered these key
topics to help keep you informed so you can have peace of mind.

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

Families

Dependent exemption of $4,050 is eliminated

• Child Tax Credit doubles to $2,000
• Adds $500 credit for other types of dependents

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

Tax rates & brackets

• Most taxpayers will see lower rates
• Highest rate drops from 39.6% to 37%

State & local taxes

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

1040 form

• New 1040 form with six new schedules
• Eliminates 1040EZ and 1040A versions

Alternative
minimum tax

• Raises the income cap so that less people are impacted
• Single taxpayers raised exempted income from $54,300 to $70,300
• Married filing jointly raised exempted income from $84,500 to $109,400

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

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

Find More Annual Limits and Fast Tax Facts HERE.

While we don't want to replace your CPA, the financial professionals at Robert Gordon & Associates are well versed in the tax laws and changes that may affect your financial situation. Call Us TODAY to schedule a FREE INITIAL CONSULTATION!!