2018 Tax Law Changes

New Tax Changes for 2018 will go into effect February 2018. Let's review them...

An overall lowering of the tax bracket rates, including the top tax bracket which falls from 39.6% to 37%

Taxable Income Tax Bracket:

$0-$9,52510%

$9,526-$38,70012%

$38,701-$82,50022%

$82,501-$157,50024%

$157,501-$200,00032%

$200,001-$500,00035%

$500,001+37%

Taxable Income Tax Bracket:

$0-$19,05010%

$19,051-$77,40012%

$77,401-$165,00022%

$165,001-$315,00024%

$315,001-$400,00032%

$400,001-$600,00035%

$600,001+37%

Taxable Income Tax Bracket:

$0-$13,60010%

$13,601-$51,80012%

$51,801-$82,50022%

$82,501-$157,50024%

$157,501-$200,00032%

$200,001-$500,00035%

$500,001+37%

Taxable Income Marginal Tax Rate:

$0-$9,52510%

$9,526-$38,70012%

$38,701-$82,50022%

$82,501-$157,50024%

$157,501-$200,00032%

$200,001-$300,00035%

$300,001+37%

The 2018 standard deduction amounts will be as follows:

For taxpayers who itemize deductions:

State and local income and real estate taxes are capped at $10,000 per year
Home mortgage interest from home equity loans will no longer be deductible
Home mortgage interest on new mortgages is only deductible to the extent of $750,000 of acquisition indebtedness
Charitable contributions of cash can be deducted currently up to 60% of adjusted gross income (up from 50%)
Miscellaneous itemized deductions -- including unreimbursed employee business expenses, tax return preparation and investment management fees -- are no longer deductible

Also,

Standard deduction for joint taxpayers increases to $24,000
Child tax credit expanded and will be allowed at higher levels of income (phasing out beginning at $400,000 of income in place of $110,000)
Up to a 20% deduction for income earned by "pass-though" businesses such as partnerships and S corporations (subject to a bunch of limitations)
Alternative Minimum Tax (AMT) provisions are retained, but fewer people will be subjected to its reach
Lifetime exemption from estate and gift taxes double for 2018 - potentially allowing for a great deal of planning to occur for those who haven't adequately protected their estate or who can now take advantage of the higher limits