7 Tax Changes You Need to Know

It’s tax time! Before you sit down with your tax professional, or begin preparing your tax return on your own, take a look at the 7 tax law changes that will impact your return.

1. Standard deductions have increased. If you’re married and filing jointly, the standard deduction is $24,000, up from $13,000 in 2017. Single taxpayers now have a standard deduction of $12,000, up from $6,500 from the previous year. For heads of households, the deduction is $18,000, up from $9,550.
2. The tax brackets have changed. Under the new legislation, seven tax brackets remain but the percentages have changed. Click here to view the new tax brackets.
3. Child tax credits increased. The child tax credit is now $2,000 per qualifying child under the age of 17, up from $1,000 last year. A $500 credit for dependents who do not qualify for the $2,000 credit.
4. A change to state and local taxes. The itemized deduction is limited to $10,000 for both income and property taxes paid during the year.
5. Retirement contribution limits increased. If you participate in retirement plans, you can now contribute as much as $19,000, up from $18,000 in 2017.
6. The mortgage interest deduction has changed. The deduction for interest is capped at $750,000 for mortgage loan balances taken out after Dec. 15 of last year. The limit is still $1 million for mortgages that were established prior to Dec. 15, 2017.
7. Personal exemption. The personal exemption has been eliminated with the tax reform bill.