The recently passed ACT is the most sweeping tax legislation since 1986. I will attempt to summarize some of the features that I believe may impact you and your taxes in the years ahead. The provisions that affect individuals are temporary until 2026; those affecting businesses are permanent.
Individual taxable income rates will be lower beginning 2018. The rates are lower thus most will receive MORE funds to spend or invest. Check your pay stubs in February vs. what you received in December.
When filing your 2018 taxes you will notice that the following provision will also apply:
The standard deduction has doubled to $24000. for married and $12000. for individuals, however, the personal exemption has
been eliminated. In most cases you will gain an additional deduction of $1650.00 filing individually or $3300.00 filing
jointly.
The deduction for state and local taxes have been limited UP TO $10,000. for payments made for property, income and sale
taxes paid in the taxing year.
Mortgage interest has also been limited on mortgage debt up to $750,000 on new principal residences or second homes. Old
mortgages will be “Grandfathered In” if the debt was incurred BEFORE December 15, 2017. Refinanced debt will also be
consider as of this date.
Interest paid on HOME EQUITY LOANS OR LINES OF CREDIT will no longer be deductible.
Medical expense deductions have been retained.
The child tax credit has been increased to $2000. per child.
Alimony will no longer be deductible by the payer or taxable to the recipient on agreements signed after December 31, 2018.
The deduction for charitable gifts has been expanded. You can now deduct up to 60% of your Adjusted Gross Income.
Moving expenses are ONLY deductible for active military on moving orders.
These are only a few of the changes that will occur this year and in the future. After completing your 2017 returns it may be wise to re-evaluate your financial future.