These changes do not apply to corporations and partnerships.They are applicable to anyone who files a 1040 Individual Income Tax Return
– The personal exemption for filers and dependents of $4050 each has been eliminated.
-The standard deduction of $6350 for singles and $12,700 for those filing jointly has been increased to $12,000 and $24,000, respectively. Head of Household filers take $18,000, up from $9350. Married taxpayers of 65 can add $1300 each to these increases ($1600 if single).
-These massive changes to the itemized deduction will force many taxpayers to claim the standard deduction:
-The deduction for real estate taxes plus state income or sales tax has been limited to $10,000. Many taxpayers exceed this number with just state income tax or property tax.
-Mortgage interest on new or existing home equity loans is eliminated unless the loan was used for renovations or additions to your personal residence.
-All miscellaneous deductions (employee business expenses, investment fees, tax prep fees, job mileage, Reserve and National Guard travel up to 100 miles from home, job-related tuition and continuing education expenses, union and other professional dues, uniform and cleaning expenses, job search, theft losses, office in the home) are eliminated.
-Casualty losses except for those in presidentially declared disaster areas are eliminated.
-Job related moving expenses, except for the miliatry, are eliminated.
-Alimonny payments made as a result of divorce decrees can no longer be claimed as an adjustment to income.
There are some positive changes
-For sole proprietors and single member LLCs filing Schedule C, those with rental real estate filing Schedule E, multi-member LLCs, Partnerships and S-Corps, Trusts and REITS, 20% of net business income is deductible from taxes (with lots of exceptions).
-The write-off for gambling losses to the extent of winnings has not changed.
-The threshold for medical expense deductions has dropped from 10% to 7.5% of AGI. Beginning in 2019, the Obamacare (Affordable Care Act) health insurance mandate is repealed.
– The top individual tax bracket is lowered from 39.6% to 37%.
-The dependent child tax credit is doubled to $2000 for each child under 17 and a new $500 dependent tax credit for all other dependents has been added.
-The annual gift tax exclusion amount is $15,000.
-Alimony payments received are no longer taxable income.