Tax Cuts and Jobs Act

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
  • Phase-out of itemized deductions based on adjusted gross income (AGI) is
  • Itemized deduction for home equity interest (other than acquisition debt) is no longer
  • Itemized deduction for miscellaneous itemized deduc- tions subject to the 2% floor are no longer 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
  • Alimony is not deductible by the payer nor includible in income by the recipient for agreements entered into after December 31,
  • Effective for 2019, the shared responsibility payment under the Affordable Care Act for not having mini- mum essential health insurance coverage is
  • The threshold for deducting medical expenses is 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
  • 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 )

Tax provisions that were reduced:

  • The 2018 individual income tax brackets are:

 

Single MFJ or QW
$0 to $9,525……………………. 10%

$9,526 to $38,700……………….. 12%

$38,701 to $82,500………………. 22%

$82,501 to $157,500…………….. 24%

$157,501 to $200,000……………. 32%

$200,001 to $500,000……………. 35%

$500,001 and over………………. 37%

 $0 to $19,050………………….. 10%

$19,051 to $77,400………………. 12%

$77,401 to $165,000…………….. 22%

$165,001 to $315,000……………. 24%

$315,001 to $400,000……………. 32%

$400,001 to $600,000……………. 35%

$600,001 and over………………. 37%
HOH MFS
$0 to $13,600………………….. 10% $0 to $9,525……………………. 10%
$13,601 to $51,800………………. 12% $9,526 to $38,700……………….. 12%
$51,801 to $82,500………………. 22% $38,701 to $82,500………………. 22%
$82,501 to $157,500…………….. 24% $82,501 to $157,500…………….. 24%
$157,501 to $200,000……………. 32% $157,501 to $200,000……………. 32%
$200,001 to $500,000……………. 35% $200,001 to $300,000……………. 35%
$500,001 and over………………. 37% $300,001 and over………………. 37%
  • The 2018 estate and trust income tax brackets are:

 

$0 to $2,550 …………….. 10%         $9,151 to $12,500…………….. 35%

$2,551 to $9,150 …………….. 24%         $12,501 and over………………. 37%

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
  • 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
  • The 2018 alternative minimum tax (AMT) exemption and phase-out ranges are:

 

Exemption Amount Phase-Out Range
Single or HOH…….. $70,300

MFJ or QW………. $109,400

MFS……………….. $54,700

 Single or HOH……….. $500,000 to $781,200

MFJ or QW………. $1,000,000 to $1,437,600

MFS……………………. $500,000 to $718,800
  • 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.