20 Things You Should Know About the New Tax Laws

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1. 2017 taxes: The new laws will apply to 2018 taxes.

2. Property taxes: The maximum total that can be written off is $ 10,000 for the combination of property taxes + income tax and sales tax.

3. Mortgage Interest Write-off: The deduction has been reduced, now you can only deduct the first $ 750,000 of your mortgage interest.

Home equity line mortgage interest will no longer be tax deductible on a primary residence unless the funds are used for renovations.

4. Capital Gains: This exclusion will remain the same at $ 250,000 for singles and $ 500,000 for married couples. You must live in the property for two of the last five years as a primary residence.

5. Standard Deduction: This deduction has almost doubled.

· Single filers: the new standard deduction has been increased to $ 12,000.

· Married spouse filers: the new standard deduction has been increased to $ 24,000.

6. Investor Business Assets: Business assets purchased new or used after September 9, 2017 such as equipment, furniture, fixtures, appliances, computers, etc. for real estate activities benefit from a 100% bonus depreciation deduction as an immediate write-off of the expense. rather than having to depreciate it over time.

7. Business entertainment: these expenses are no longer tax deductible.

8. Inheritance Tax: Inheritance tax applies to the transfer of property after the death of a person. The tax-exempt amount was doubled from $ 5.49 million for individuals and $ 10.98 million for married couples.

9. Health insurance: The penalty for not having health insurance has been removed. The Congressional Budget Office has predicted that as a result, 13 million fewer people will have insurance coverage by 2027 and that premiums will rise by around 10% per year. most years.

10. Personal exemption: this deduction has now disappeared. Previously, you could claim a personal exemption of $ 4,050 for: yourself; your spouse and each of your dependents, which would reduce your taxable income.

11. The Child Tax Credit: This credit has been increased to $ 2,000 for children under the age of 17. The full credit can now be claimed by a single parent who earns up to $ 200,000 and married couples who earn up to $ 400,000.

12. Non-dependent children: This may apply to any number of people that adults support, such as children over 17, elderly parents, or adult children with disabilities for a temporary credit of $ 500 .

13. Medical expenses: You can deduct medical expenses that total more than 7.5% of your adjusted gross income.

14. Alimony payments: The person writing the checks cannot deduct their alimony payments if the divorce or separation documents are dated after 12/31/2018.

15. Interest on student loans:

The annual deduction of $ 2,500 for interest on student loans will remain.

16. 529 Savings Accounts: These qualified tuition plans are not taxed, but previously could only be used for college expenses. Now, $ 10,000 can be distributed annually to cover the cost of sending a child to a public, private or religious elementary or secondary school.

17. Deficit: The net number tightened by the non-partisan Joint Committee on Taxation estimates that tax reform will likely increase deficits by $ 1.46 trillion over the next decade.

18. Corporate tax: their rate drops to 21% compared to the previous 35%. The alternative minimum corporate tax has also been rejected.

19. Deduction for tax preparation: The deduction for the preparation of your tax returns by a professional or for accounting software has been eliminated.

20. Fewer Local Accountants: The increase in standard deductions will likely result in more people preparing their own personal tax returns.

During the election campaign, Trump said: "I want to bankrupt H&R Block". Over time there will likely be fewer local professional accountants with their advice, the community will likely suffer from this loss.


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