The new tax rules associated with the Tax Cuts and Jobs Act may impact your return this year:
- Standard Deduction Increased: A key change is an increase in the standard deduction compared to 2017.
- Personal Exemption Eliminated: The $4,050 personal exemption for individuals and dependents.
- Child Tax Credit Expanded: In 2018, the credit increases to $2,000. Plus there is a new $500 credit for non-child dependents.
- State and Local Taxes: $10,000 in state and local income taxes is the maximum that can be deducted.
- ACA Individual Mandate Repealed: No healthcare coverage in 2019? You will not have to pay a penalty.
- Mortgage Interest Deduction Dropped: Individuals who purchase a home in 2018 can deduct mortgage interest up to $750,000 of acquisition indebtedness. The interest deduction on home-equity indebtedness has been eliminated.
- Retirement Fund Contribution Limits Increased: You can now contribute up to $18,500 to your 401(k), 403(b), most 457 plans and Thrift Savings Plan. That’s a $500 increase from 2017.
- Qualified Business Income Deduction- Qualified Business Income Deduction (QBI): Taxpayers who own sole proprietorship, LLCs, rental properties, S-Corporations and partnerships may be able to deduct 20% of qualified business income if they meet specific criteria.
If you need tax help, contact our law office at 816-524-4949 or visit our website at Hoorfarlaw.com.