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The Tax Cuts and Jobs Act of 2017

 

-Standard Deductions have been increased.

Filing Status 2018                     Standard Deduction

Single

$12,000

Married Filing Jointly

$24,000

Married Filing Separately

$12,000

Head of Household

$18,000

 

 

-Medical Expense Deduction has been reduced to 7.5% of your AGI down from 10% of your AGI.

-Charitable Contributions (individual) has been increased from 50% to 60% of AGI.

-Exemptions have been removed. This was a deduction of each member of your household.

-2018 Tax Rates and Brackets https://www.atlantacpas.com/tax-rates

-Combine Mortgage Interest phaseout deduction decreased to $750,000. The previous $1 million phase is grandfathered in if you mortgage was originated before December 15, 2017.

-Child Tax Credit is increase from 1,000 to 2,000 and the phase out at level has increased from 110,000 to 400,000 for MFJ & from $75,000 to 200,000 for single

-Other Deductions That Are Disappearing

  • Casualty and theft losses (except those attributable to a federally declared disaster)
  • Unreimbursed employee expenses
  • Tax preparation expenses
  • Alimony payments
  • Moving expenses
  • Employer-subsidized parking and transportation reimbursement

 

-Federal Withholding (W-4) Check https://apps.irs.gov/app/withholdingcalculator/.

**This calculator checks your Federal ETR (Effective Tax Rate) **

**Keep in mind that your withholding percentage is a marginal tax rate, which is divided four ways between Federal, Social Security, Medicare and State**

**Example; if you are withholding 20% of tax from your paycheck your Federal ETR will be closer to 13-15%**

For a full list of Tax Reform Basics for Individuals please visit https://www.irs.gov/pub/irs-pdf/p5307.pdf