Tax Rates

2017 under previous tax law

Tax Taxable Income
Rate Individual Married filing Jointly

10% $0 - $9525 $0 - $19,050

15% $9,526 - $38,700 $19,051 - $77,400
25% $38,701 - $93,700 $77,401 - $156,150
28% $93,701 - $195,450 $156,151 - $237,950
33% $195,451 - $424,950 $237,951 - $424,950
35% $424,951 - $426,700 $424,951 - $480,050
39.6% $426,701 + $480,051 +

2018 under NEW LAW

10% $0 - $9,525 $0- $19,050
12% $9526 - $38,700 $19,051 - $77,400
22% $38,701 - $82,500 $77,401 - $165,000
24% $82,501 - $157,500 $165,001 - $315,000
32% $157,501- $200,000 $315,001 - $400,000
35% $200,001 - $500,000 $400,001 - $600,000
37% $500,001 + $600,001+

Effective: 1-1-2018
Revert to 2017 law: 1-1-2026
Tax brackets will be adjusted for inflation using new factors

CURRENT LAW Tax Cuts & Jobs Act (2018) (New Law)

PERSONAL EXEMPTIONS
$4050 Suspended through 2025

STANDARD DEDUCTIONS
Single: $6,350 Single: $12,000

Head of Household: $9,350 Head of Household: $18,000

Married filling Joint: $12,700 Married filing Joint: $24,000

ITEMIZED DEDUCTIONS
Medical: Allowed in excess of 10% of AGI Retained for 2017 & 2018 with AGI
Threshold of 7.5%. Threshold increases
To 10% after 2018.

Taxes: Property taxes & state & local income Deduction for taxes is retained but capped
 Taxes are deductible
Home Mortgage Interest
Interest on up to $1Million debt
For Primary & Secondary home plus
Grandfathered
$100,000 of Home Equity loan debt.
Charitable Contributions
Allows deductions, not exceeding
50% of AGI.
Personal Casualty & Theft Losses
If loss exceeds $100 and sum of all
Exceeds 10% of AGI
ABOVE THE LINE DEDUCTIONS
ALIMONY
Allowed above the line deduction for
Qualified payments, and recipient reports
the money as income.
at $10,000 for the year.
Interest on $750,000 of acquired debt for
Primary & Secondary homes,
For debts up to $1M debt acquired prior to
12-12-2017, and Repeals deduction for
Home Equity Loans.
Increases AGI limit to 60%. BANS
Charitable Deductions for payments made
In exchange for college athletic event
seating rights. (Affects about 90,000 NE
Football season ticket holders.)
After 12-31-18, no longer deductible
UNLESS Disaster declared by POTUS
After 12-31-18, no longer deductible
& no longer taxable as income.
CHILD TAX CREDIT
Allows a credit of $1000 per qualified
Child under the age of 17, with several
Other modifications.
ALTERNATIVE MINIMUM TAX (AMT)
Individuals- 2017 Exemption amounts are
$84,500 for married taxpayers filing jointly.
$42,250 for married filing separate, and
$54,300 for single & HOH
Exemption phase-out thresholds are:
$160,900 for Married, filing jointly.
$80,450 for Married, filing separately
$120,700 for single & HOH
EDUCATION Provisions
Several provisions, but a couple of
highlights are:
Section 529 plans are for “Post-Secondary”
Education
Retains the “under age 17” requirement
and Increases the credit to $2000, along
With other modifications.
Retained AMT, but exemption amounts
Are increased to:
$109,400 for Married filing Jointly
$54,700 for Married filing separately
$70,300 for single & HOH
Exemption phase out thresholds increased
to $1M for married filing jointly and $500K
for others.
Amended to allow tax-free distributions of
up to $10,000 per year for grammar and
High School education tuition & expenses.
Higher Education Interest Retained
Allows deduction of up to $2500 for interest
Paid on post-secondary education loans.

Tuition deduction Retained

HOME SALE EXCLUSION

Generally, where a taxpayer owns and uses Retained
A home as principal residence for 2 out of
The 5 previous years prior to it’s sale,
Taxpayer can exclude up to $250,000
($500,000 for married couple) of profit
From the sale.

ROTH CONVERSION RECHARACTERIZATIONS

Permits, within certain time limits, a No longer can be recharacterized.
Traditional to Roth IRA conversion to be undone.

ESTATE AND GIFT TAXES

$5.49 Million (2017) is exempt from gift and/or Exclusion increased to $10M adjusted
Estate tax. This is in addition to the annual for inflation since 2011, which is
Gift tax exclusion, which for 2017 is $14,000 estimated to be about $11.2 M. Annual
Per gift recipient. Gift tax exclusion retained.
SECTION 1031 EXCHANGE
Non-recognition of gain when taxpayers After 12-31-17, ONLY REAL property
Trade properties of like-kind that are used will qualify for Sec. 1031 treatment.
For business or investment.

BUSINESS CHANGES
Several changes relative to business. Such as: Net Operating Loss deduction, Section 179
expensing, Deduction for Pass-through Income, Excess Business Losses for Individuals, and
other items.

FINALLY
The ACA Individual Insurance Mandate.
Anyone who does not meet one of the limited exemptions must have health insurance or pay a
penalty. Called “Shared responsibility payment”.

This Individual Mandate was REPEALED, effective in 2019.