2018 Tax Cuts and Jobs Act Changes to be Aware of
As you are meeting with your clients this year you should make them aware of some of the 2018 changes that will or may affect their federal return for next year.
Here are some of the changes that go into effect in 2018 from the Tax Cuts and Jobs Act:
- Standard Deduction will be increased to $12,000 for single individuals and $24,000 for married filing joint filers.
- Exemptions are no longer applicable.
- Child tax credit was increased to $2,000 for eligible children under 17 of which $1,400 may be refundable.
- A $500 nonrefundable credit will be available for eligible children that are 17, 18 or full time students ages 19 -24 and other eligible dependents.
- Itemized deduction for taxes on Schedule A will be limited to $10,000.
- Job expenses and miscellaneous itemized deductions subject to 2% AGI floor will no longer be deductible on Schedule A. This includes employee business expenses that were reported on Form 2106 such as vehicle expenses, travel expenses, meals and entertainment, job education, etc.
- For 2018 only casualty losses that occur in a presidentially declared disaster zone will be deductible as an itemized deduction on Schedule A.
- An itemized deduction for mortgage interest will only be allowed for a taxpayer’s principal home.
- An itemized deduction will no longer be allowed for interest on a home equity loan.
See the New Federal Tax Law Changes Included in the Tax Cuts and Jobs Act page in the Tax Resource Center for a more complete listing of the tax provisions included in the Tax Cuts and Jobs Act.