<\/span><\/p>\nGuest Blog from Abdo, Eick & Meyers<\/strong><\/p>\nThe recently enacted Tax Cuts and Jobs Act (TCJA) is a sweeping tax package. Here’s a look at some of the more important elements of the new law that have an impact on\u00a0individuals<\/strong><\/em>. Unless otherwise noted, the changes are effective for tax years beginning in 2018 through 2025.<\/p>\nHere are some highlights:<\/p>\n
\nTax rates.<\/strong>\u00a0The new law imposes a new tax rate structure with seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.<\/li>\nCapital gains and dividends.<\/strong>\u00a0The rates applicable to net capital gains and qualified dividends were not changed.<\/li>\n<\/ul>\n\nStandard deduction.<\/strong>\u00a0The new law increases the standard deduction to $24,000 for joint filers, $18,000 for heads of household, and $12,000 for singles and married taxpayers filing separately. Given these increases, many taxpayers will no longer be itemizing deductions. These figures will be indexed for inflation after 2018.<\/li>\n<\/ul>\n\nExemptions.<\/strong>\u00a0The new law suspends the deduction for personal exemptions. Thus, starting in 2018, taxpayers can no longer claim personal or dependency exemptions.<\/li>\n<\/ul>\n\nNew deduction for “qualified business income.”<\/strong>\u00a0Starting in 2018, taxpayers are allowed a deduction equal to 20 percent of “qualified business income,” otherwise known as “pass-through” income, i.e., income from partnerships, S corporations, and sole proprietorships.<\/li>\n<\/ul>\n\nChild and family tax credit.<\/strong>\u00a0The new law increases the credit for qualifying children (i.e., children under 17) to $2,000 from $1,000, and increases to $1,400 the refundable portion of the credit. It also introduces a new (nonrefundable) $500 credit for a taxpayer’s dependents who are not qualifying children. The adjusted gross income level at which the credits begin to be phased out has been increased to $200,000 ($400,000 for joint filers).<\/li>\n<\/ul>\n\nState and local taxes.<\/strong>\u00a0The itemized deduction for state and local income and property taxes is limited to a total of $10,000 starting in 2018.<\/li>\n<\/ul>\n\nMortgage interest.<\/strong>\u00a0Under the new law, mortgage interest on loans used to acquire a principal residence and a second home is only deductible on debt up to $750,000 (down from $1 million), starting with loans taken out in 2018. And there is no longer any deduction for interest on home equity loans, regardless of when the debt was incurred.<\/li>\n<\/ul>\n\nMiscellaneous itemized deductions.<\/strong>\u00a0There is no longer a deduction for miscellaneous itemized deductions. This category included items such as tax preparation costs, investment expenses, union dues, and unreimbursed employee expenses.<\/li>\n<\/ul>\n\nMedical expenses.<\/strong>\u00a0Under the new law, for 2017 and 2018, medical expenses are deductible to the extent they exceed 7.5 percent of adjusted gross income for all taxpayers. Previously, the AGI “floor” was 10% for most taxpayers.<\/li>\n<\/ul>\n\nOverall limitation on itemized deductions.<\/strong>\u00a0The new law suspends the overall limitation on itemized deductions that formerly applied to taxpayers whose adjusted gross income exceeded specified thresholds.<\/li>\n<\/ul>\n\nMoving expenses.<\/strong>\u00a0The deduction for job-related moving expenses has been eliminated, except for certain military personnel. The exclusion for moving expense reimbursements has also been suspended.<\/li>\n<\/ul>\n\nAlimony.<\/strong>\u00a0For post-2018 divorce decrees and separation agreements, alimony will not be deductible by the paying spouse and will not be taxable to the receiving spouse.<\/li>\n<\/ul>\n\nHealthcare “individual mandate.”<\/strong>\u00a0Starting in 2019, there is no longer a penalty for individuals who fail to obtain minimum essential health coverage.<\/li>\n<\/ul>\n\nEstate and gift tax exemption.<\/strong>\u00a0Effective for decedents dying, and gifts made, in 2018, the estate and gift tax exemption has been increased to roughly $11.2 million ($22.4 million for married couples).<\/li>\n<\/ul>\n\nAlternative minimum tax (AMT) exemption.<\/strong>\u00a0The AMT has been retained for individuals by the new law but the exemption has been increased to $109,400 for joint filers ($54,700 for married taxpayers filing separately), and $70,300 for unmarried taxpayers.<\/li>\n<\/ul>\n\nCharitable contributions.<\/strong>\u00a0The 50% limitation for cash contributions to public charities and certain private foundations is increased to 60%.<\/li>\n529 Plans.<\/strong>\u00a0 Qualified higher education expenses now include expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school with a limit of $10,000 per year.<\/li>\n<\/ul>","protected":false},"excerpt":{"rendered":"The new tax bill significantly changes the tax code for individuals. The following guest blog courtesy of Abdo, Eick & Meyers provides a helpful overview of what the new tax bill means for individual filers. This information will also be covered in greater detail at…<\/p>","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":""},"categories":[888],"tags":[547,288,536,496,226],"post_author":[],"class_list":["post-5238","post","type-post","status-publish","format-standard","hentry","category-advocacy","tag-abdo-eick-meyers","tag-legislative-update","tag-tax-cuts-and-jobs-act","tag-tax-reform","tag-taxes"],"acf":[],"yoast_head":"\n
Tax Bill - Highlights for Individuals - Greater Mankato<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n