How the New Tax Bill Will Affect You in 2018
If you are interested in how the Senate/House conference bill might affect your taxes if passed this week, here are some of the highlights:
2018 Tax Bill Highlights
1. New, lower 7 tax bracket system where each bracket is roughly 2% lower
2. No more personal exemptions. Instead, there is a new higher standard deduction of $12,000 (Single Filer) $24,000 (Married Filing Joint). This means that many of you will no longer have enough deductions to itemize in the future. This is better for single and childless married couples, but likely less overall deductions for married couples with more than 1 child.
3. State, Local & Property tax deduction limit of $10,000 (assuming you have enough total deductions to itemize)
4. You can no longer deduct interest from home equity lines of credit (until it's phased back in 2026) unless the interest is used to improve your home.
5. No more miscellaneous itemized deductions (advisor fees, tax prep fees, unreimbursed job expenses)
6. You can use $10k per student from 529 plans for private elementary and secondary schools (and homeschool)
7. Child tax credit is doubled to $2,000 per child ($1,400 is refundable thanks to Marco Rubio)
8. AMT exemption increased so it will apply to fewer taxpayers (not to mention the main AMT trigger, State Taxes, will also be capped, thereby further eliminating AMT)
9. Estate tax exemption is doubled to $11mm per person
Notably not changed:
1. Grad student tuition waivers
2. Student loan interest deduction
3. American Opp Credit (college)
4. No FIFO requirement on capital gain sales
There is a whole lot more changes in the bill, so if you have questions of how this directly applies to your situation,feel free to reach out!