Tax Reform Updates

Summary of 2018 Tax Reform Changes (IRS)

  • The Standard Deduction will almost double. Married Filing Joint was raised by IRS to $24,000, Single to $12,000 and Head of Household to $18,000.
  • No personal exemptions will be allowed.
  • The Child Tax Credit was increased from $1,000 to $2,000 for qualifying children under age 17 at the end of the year. A new Family Tax Credit for certain family members who qualify as Dependents is $500(including parents)
  • No unreimbursed job expenses, investment management fees or tax preparation fees can be deducted.
  • Property tax paid plus the State withholding/sales tax deduction is limited to $10,000. (not NY)
  • Medical, Charity and Mortgage Interest still OK.
  • Gambling losses up to the amount of winnings are still OK if you itemize. But with the new Standard Deduction many people will not improve their situation by itemizing.
  • Taxes brackets have been reduced across the board.
  • The Student Loan Interest Deduction is still OK;
  • Teachers classroom supply deduction ($250) still OK.
  • Child Care Credit still applies as does the American Opportunities and Lifetime Learning Credits for college students.
  • Residential Energy Credits were discontinued for 2018.
  • Starting for divorces finalized in 2019 and later, alimony received will no longer be taxable, alimony paid will not be deductible.
  • New York has decided to “decouple” from some of these changes. So New Yorkers who would normally itemize their deductions, may still claim work expenses which exceed 2% of their adjusted gross income. They have also indicated they will not follow the IRS lead on the changes to treatment of alimony.

Check with IRS and other State websites for complete information regarding these changes.