New Tax Laws For 2018

Between the IRS and the recent changes in the tax law, here are a number of significant changes that will impact taxes now and going forward. Should you ever be confused about doing your taxes, fear not. You can get help from a tax preparation service like H&R Block, and you can check https://www.raise.com/coupons/hr-block to see if there are any savings available.

Those who are married and filing jointly will have an increased standard deduction of $24,000, up from $13,000 as under previous law.

Single taxpayers and those who are married and file separately now have a $12,000 standard deduction, up from the $6,500.

For heads of households, the deduction will be $18,000, up from $9,550. So, you may be wondering “where’s my refund?” and that’ll come in due course but there are still a few more things you need to know.

The personal exemption has been eliminated with the tax reform bill.

A new 37 percent top rate will affect individuals with incomes of $500,000 and higher. The top rate applies for married taxpayers who file jointly at $600,000 and over.

The estate tax exemption doubles to $11.2 million per individual and $22.4 million per couple in 2018.

The child tax credit has been raised to $2,000 per child — those under 17 — up from $1,000. A $500 credit is available for dependents who do not get the $2,000 credit.

The deduction for mortgage interest is capped at $750,000 for mortgage loans taken out after Dec. 15 of last year. The limit is still $1 million for mortgages that were established prior to Dec. 15, 2017.?

The itemized deduction is limited to $10,000 for both income and property taxes paid during the year.????

Employees who participate in certain retirement plans ? 401(k), 403(b) and most 457 plans, and the Thrift Savings Plan – can now contribute as much as $18,500 this year, a $500 increase from the limit for 2017.

Savers who contribute to individual retirement accounts will have higher income ranges following cost-of-living adjustments. Note that the deduction phases out for individuals and their spouses who are covered by workplace retirement plans.? For single taxpayers, the limit will be $63,000 to $73,000.? For married couples, the phase out range will vary depending on whether the IRA contributor is covered by a workplace retirement plan or not. When the spouse who is investing has access to an employer plan, the range is $101,000 to $121,000.

For individuals who don’t have a retirement plan but are married to someone who does, the phase out has been raised to $189,000 to $199,000.?The phase out was not adjusted for married individuals who file a separate return and who are covered by a workplace retirement plan. That range is $0 to $10,000.????