1–Standard deductions go UP
Married filing jointly–standard deduction increase to $24,000, up from the $13,000 it would have been under previous law.
Single taxpayers or married, filing separately—standard deduction increase to $12,000, up from the $6,500 it would have been for this year prior to the reform.
For heads of households, the standard deduction will be $18,000, up from $9,550.
2–Personal exemptions—GONE!
The personal exemption claim has been eliminated with the tax reform bill—you will no longer claim yourself, dependents, or other family members.
3–Top income tax rate
Some brackets went up, some went down. A new 37 percent top rate will affect individuals with incomes of $500,000 and higher. Lower income brackets went down.
4–Estate tax
The estate exemption doubles to $11.2 million per individual and $22.4 million per couple in 2018.
5–Child tax credit
The child tax credit has been raised to $2,000 per qualifying child, (children age 17 and under), up from $1,000. A $500 credit is available for dependents who do not qualify for the $2,000 credit.
6–Mortgage interest (depends on when you got your mortgage)
The deduction for interest is capped at $750,000 for mortgage loan balances taken out after Dec. 15 of last year. The limit is still $1 million for mortgages that were established prior to Dec. 15, 2017.
7–State and local taxes (for some)
The itemized deduction is capped at $10,000 for both income and property taxes paid during the year. If your taxes were higher than that, you lose the amount over $10,000.
8–Contribution limits for retirement savings
Employees who participate in certain retirement plans ‒ 401(k), 403(b) and most 457 plans, and the Thrift Savings Plan – can now contribute as much as $18,500 this year, a $500 increase from the $18,000 limit for 2017.
9—Savings in IRA’s
The maximum amount you can contribute to a traditional IRA for those under the age of 50 is $5500. Workers age 50 and older can add an extra $1000 ($6500).
10—Income Phase-out
For individuals who are single or the heads of their households, the income phase-out has been raised to $120,000 to $135,000. For married couples who file jointly, the range climbs to $189,000 to $199,000.
The phase-out was not adjusted for married individuals who file a separate return. That is $0 to $10,000.
