Recap Of Some New Tax Laws In Place For 2018

Just another recap of some new tax laws in place for 2018:

  • The medical expense deductions AGI threshold will remain 7.5% through 2018.
  • The new law limits the amount of taxes you can deduct on the schedule A to a maximum of $10,000 for all taxes, property, DMV, state taxes etc.
  • You can still deduct the interest paid for home purchases on a first and second home. The aggregate amount of loans for one or two homes cannot exceed $750,000.
  • Home equity debt is only deductible to the extent that the debt was used to purchase or improve the home.
  • Alimony agreements amended or entered into after 2018 are no longer taxable to the recipient and not deductible by the payer.
  • The individual mandate for health Insurance is still in place for 2018.  However, there is an exemption from the penalty for people that the coverage is not affordable. Meaning that the minimum net cost of premiums is more than 8.16% of household income.  The mandate is eliminated as of 2019.
  • The new child tax credit was increased to $2,000 per child and the phase out does not begin until $200k single and $400k MFJ. 
  • C-Corporation tax rate is now a flat 21%.
  • The new law provides a deduction for pass-through and sole proprietorship businesses of up to 20% of their QBI (another test applies and it is the lesser of 2 calculations).  Service businesses are subject to the previous mentioned calculations, but could be limited or excluded from the credit based on income.