General Tax Law changes in 2018 and 2019
- Nearly double the standard deduction which means fewer people will be itemizing.
• Personal exemptions are gone.
• Child tax credit increased to $2,000, is refundable up to $1,400, and the phase-out amount increased.
• A cap of $10,000 is applied to the State and Local Tax deduction.
• The home mortgage interest deduction decreased the cap on homes to $750,000.
• Starting in 2019 there will be no more Obamacare penalties.
• For divorces finalized in 2019 and beyond, Alimony is no longer tax deductible.
• The Alternative Minimum Tax Exemption (AMT) exemption was increased by about 30%, thus fewer taxpayers will have to pay it.
• During 2018 out of pocket medical expenses over 7.5% of AGI can be deducted. In 2019 the percentage raises to 10% of AGI.
• The marriage tax penalty for dual earners is mostly gone except for married couples earning more than $400,000.
• Can donate up to 60% of income to qualified charities.
• Inflation is calculated according to Chained CPI now which assumes that as a price of a particular good or service gets too expensive, consumers will trade down to a cheaper alternative. This will result in tax bracket thresholds raises slower along with other limits for certain deductions and credits.
• Corporate tax rates are now a flat 21% on all profits.
This is just a brief list of some of the many changes to the tax laws. Please contact your professional advisor with any specific questions.