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New Tax Changes

Significant Changes - Tax Cuts and Jobs Act of 2017 (TCJA)

 Individuals

 

Standard deduction increased:

  • $12,000 for single filers,
  • $18,000 for heads of household, and
  • $24,000 for joint filers in 2018

 

Alimony is nondeductible to the payer and

   tax free to the recipient after 2018.

 

Child Tax Credits doubled to $2,000 for each qualified child.

 

Personal exemptions are discontinued (2018-25).

 

Miscellaneous itemized deductions Suspended.

 

Unreimbursed employee expense deductions removed.

 

Medical expenses deduction haircut back to 7.5% AGI (2017-18)

 

Charitable contribution deduction retained,

 

Mortgage interest deduction limited to the first $750,000 in principal value.

 

State and local tax deduction limited to a combined $10,000 for income, sales, and property taxes.

 

Exemption on the alternative minimum tax (AMT) increased from $86,200 to $109,400 for married filers, and the phaseout threshold increased to $1 million.

 

Standard mileage rates

  • Business       0.545
  • Medical          0.18
  • Moving           0.18 (military only)
  • Charitable     0.14

 

Businesses (2018-25)

 

Corp AMT abolished

 

All C corps have a single tax rate of 21% effective in 2018

 

Taxes paid or accrued in carrying on a trade or business are not limited.

 

Allows full and immediate expensing of short-lived capital investments for five years.

 

Increases the section 179 expensing cap from $500,000 to $1 million.

 

Establishes a 20 percent deduction of qualified business income from certain pass-through

businesses.


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