Jeepers, nobody likes tax season, but there are some interesting changes that you ought to know before embarking on your taxes this year. Please note that I am not a tax advisor so all of these changes should be checked with your accountant or tax advisor first. Let’s take a look at what that means for you.
For instance, the standard deduction has increased regardless of what your filing status was in 2018. If you are single or married and filing separately you can deduct up to $12,000. If you are married and file jointly you can deduct up to $24,000. As head of the household you can deduct another $18,000.
You are no longer able to deduct $4,050 per dependent. That clause was eliminated entirely.
The child tax credit was raised from $1,000 to $2,000 and there is even a new clause that allows you to deduct another $500 for non-child dependents. This can be used for handicapped adult children or even handicapped parents of other family.
State and local taxes have been capped. As a taxpayer you can deduct up to $10,000 in state and local income taxes.
The American Care Act Individual Mandate was repealed. Changes in this regard do not begin until 2019. This means that if you select not to have healthcare coverage there will be no penalty. Bravo!
Deductions for mortgage interest have been reduced. Individuals who purchase homes in 2018 can only deduct up to $750,000 in mortgage debt. Previously they were allowed to deduct up to the one million dollar mark. There is no longer a clause that allows a deduction for home equity loans.
I hope this helps.