What You Need to Know About the Latest Tax Reform
To maximize your tax refunds, you’ll need to understand the most recent tax changes. To help, ACCC explains what consumers need to know about the latest tax reform.
Here are 7 points to note from the new tax reform:
- New Tax Brackets & Tax Deductions – 2018 tax brackets were updated with lower top marginal tax rates, percentage of income paid on taxes & new income levels. The standard tax deduction has increased from $6,350 to $12,000 for single taxpayers. It increased from $12,700 to $24,000 for married filing jointly. Deductions also increased from $9,350 to $18,000 for head of household.
- Personal Exemptions – Personal exemptions have now been eliminated. The original exemption allowed families to subtract $4,050 for each child/dependent.
- State and Local Taxes (SALT) – With the new tax freeform, SALT deductions are limited to $10,000. Before, there was no limit on SALT deductions.
- Child/Dependent Tax – The tax reform changes increase the child/dependent tax from $1,000 to $2,000 per child, with $1,400 being refundable.
- Mortgage Interest Tax Deduction – Tax reform restricts how much mortgage interest can be deducted. It decreased from $1 million to $750,000 for married couples. It also decreased to $375,000 for married couples filing separately.
- Charitable Donations – Tax reform increased this deduction from 50% to 60% of income for those who itemize their deductions.