Tax Changes For The 2018 Tax Year!

Tax Rates were reduced for 2018

  • Rate Individuals Married Filing Jointly
    10% Up to $9,525 Up to $19,050
    12% $9,526 to $38,700 $19,051 to $77,400
     22% 38,701 to $82,500 $77,401 to $165,000
    24% $82,501 to $157,500 $165,001 to $315,000
    32% $157,501 to $200,000 $315,001 to $400,000
    35% $200,001 to $500,000 $400,001 to $600,000
    37% over $500,000 over $600,000

Standard Deductions for 2018

  • Single or Married Filing Separately          $12,000
  • Married Filing Joint                                         $24,000
  • Head of Household                                            $18,000

Personal Exemption is Zero for 2018.  Congress killed this deduction in 2018

Child Credit

  • Credit for child under 17 is up from $1,000 per child to $2,000 per child
  • Higher thresholds before phase out
  • Refundable amount grows from $1,100 to $1,400
  • Children with ITIN not eligible

 

Filing Status 2017 Child Tax Credit Threshold 2018 Child Tax Credit Threshold
Single $75,000 $200,000
Married Filing Jointly $110,000 $400,000

2018 Credit for Other Dependents

  • Non-Child Dependent Credit – $500 per dependentSame phase out limits – $200K or $400K
  •  This is a non-refundable credit
  •  For children 17 years old or over
  •  For senior parents
  •  For Children with ITINs
  •  For Children with disabilities

Mileage rates For 2018

  • 54.5 cents per mile for business (up 1 cent per mile from 2017)
  • 18 cents per mile for medical reasons and for moving (up 1 cent per mile from 2017)
  • 14 cents per mile for charitable (no change from 2017)

State and Local and Property Taxes

  • Limited to $10,000
  • Taxpayers who file as Married Filing Separately are limited to $5,000

Mortgage Interest

  • Mortgage Interest can only be claimed on mortgages up to $750,000 after December 15, 2017
  • Home Equity interest can only be claimed when used to buy or improve a home

Miscellaneous Deductions cannot be claimed in 2018

No deductions for:

  • Unreimbursed employee expenses
  • Uniforms
  • Union Dues
  • Tax Preparation fees
  • Investment expenses

 

Moving Expenses

  • Movie expenses suspended for 2018 except for military
  •  Employers will include moving expenses as taxable income

Alternative Minimum Tax (AMT)

  •  AMT Exemption increased significantly
Filing Status 2017 AMT Exemption 2018 AMT Exemption
Single or Head of Household $54,300 $70,300
Married Filing Jointly $84,500 $109,400
  • AMT Phase-out increased significantly
  •  $1,000,000 for Married Filing Jointly
  •  $500,000 for all other taxpayers

Alimony

  •  Prior to 2019

Alimony received is counted as income

Alimony paid is deducted

  •  Starting in 2019

Alimony received is not counted as income

Alimony paid is not tax deductible

Health Insurance

  •  Penalty for not buying insurance still applies in 2018
  •  Penalty will be eliminated in 2019

529 Plan

  •  Previously, 529 plan only used for higher education
  •  Now, 529 plan can be used for private K-12
  •  Up to $10,000 a year per student can be withdrawn for K-12 education