1. 2017 taxes: The new laws will apply to 2018 taxes.
2. Property taxes: The maximum total that can be written off is $ 10,000 for the combination of property taxes + income and sales tax.
3. Cancellation of mortgage interest – The deduction has been reduced, now you can only deduct the first $ 750,000 of mortgage interest.
The mortgage interest on the home equity line will no longer be tax deductible on a primary residence, unless the funds are used for renovations.
4. Capital Gains: This exclusion will remain the same at $ 250,000 for singles and $ 500,000 for married couples. You have to live in the property for two of the last five years as your primary residence.
5. Standard deduction: This deduction has almost doubled.
Single taxpayers: The new standard deduction has been increased to $ 12,000.
ยท Married Joint Filers: The new standard deduction has been increased to $ 24,000.
6. Investor Business Assets: Business assets purchased new or used after September 9, 2017, such as equipment, furniture, fixtures, appliances, computers, etc. for real estate activities, they have an additional depreciation deduction of 100% as an immediate write-off of the expense. rather than having to depreciate it over time.
7. Business entertainment: These expenses are no longer tax deductible.
8. Inheritance tax: Inheritance tax applies to the transfer of property after the death of a person. The amount exempt from the tax has doubled from $ 5.49 million for individuals and $ 10.98 million for married couples.
9. Health insurance: The penalty for not having health insurance is eliminated. The Congressional Budget Office has predicted that as a result, 13 million fewer people will have insurance coverage by 2027, and premiums will increase by about 10% most years.
10. Personal exemption: this deduction no longer exists. Previously, you could claim a personal exemption of $ 4,050 for: yourself; your spouse and each of your dependents, which would lower your taxable income.
11. The Child Tax Credit: This credit has been increased to $ 2,000 for children under 17 years of age. The full credit can now be claimed by a single parent earning up to $ 200,000 and married couples earning up to $ 400,000.
12. Non-Child Dependents: This may apply to a number of people who are supported by adults, such as children 17 years of age and older, elderly parents, or adult children with a disability for a temporary credit of $ 500.
13. Medical Expenses: You can deduct medical expenses that add up to more than 7.5% of your adjusted gross income.
14. Alimony Payments – The person writing the checks cannot deduct your alimony payments if the divorce or separation paperwork is dated after 12/31/2018.
15. Student Loan Interest:
The $ 2,500 annual deduction for student loan interest will remain.
16. 529 Savings Accounts – These qualified tuition plans are not taxable, but previously could only be used for college expenses. Now $ 10,000 can be distributed annually to cover the cost of sending a child to a public, private, or religious elementary or secondary school.
17. Deficit: The net number calculated by the nonpartisan Joint Tax Committee estimates that the Tax Reform will likely increase deficits by $ 1.46 trillion over the next decade.
18. Corporation tax: Your rate is being reduced to 21% from the previous 35%. The alternative minimum tax for corporations has also been ruled out.
19. Tax preparation deduction: The deduction for having your taxes prepared by a professional or accounting software has been eliminated.
20. Fewer local accountants: Increasing standard deductions will likely result in more people preparing their own personal tax returns.
In the election campaign, Trump has said “I want to put H&R Block out of business.” Over time, there are likely to be fewer local professional accountants along with their boards, and the community is likely to suffer this loss.
