Domestic Production Activity Deduction is repealed
DPAD allowed certain qualifying US business a deduction equal to 9% of the lesser of the taxpayer’s qualified production activities income or the taxpayer’s taxable income for the tax year.
New 20% Deduction for “Qualified Business Income”
This new deduction should provide a substantial tax benefit to individuals with “qualified business income” from a partnership, S corporation, LLC, or sole proprietorship. This income is sometimes referred to as “pass-through” income. The deduction is 20% of your “qualified business income (QBI)” from a partnership, S corporation, or sole proprietorship, defined as the [...]
Personal Exemptions
The deduction for personal exemptions is effectively suspended by reducing the exemption amount to zero.
Standard Deduction
The standard deduction is increased to $24,000 for married individuals filing a joint return, $18,000 for head-of-household filers, and $12,000 for all other taxpayers, adjusted for inflation in tax years beginning after 2018. No changes are made to the current-law additional standard deduction for the elderly and blind.
State and Local Tax
The new law limits the aggregate deduction for state and local real property taxes, personal property taxes, state and local income and general sales taxes (if elected) for any tax year to $10,000 ($5,000 for marrieds filing separately). Important exception: The limit doesn't apply to state and local, real property taxes; and state and [...]
Kiddie Tax Rate Change
The tax on unearned income of children under the age of 19 (or full time students under age 24) that exceeded $2,100 was taxed at their parents tax rate. The Tax Cuts and Jobs Act modifies the kiddie tax to effectively apply the estates' and trusts' ordinary and capital gains rates to the net [...]
Child Tax Credit Doubled and New Lower Credit for Other Dependents
Under pre-Act law, the child tax credit was $1,000 per qualifying child, but it was reduced for married couples filing jointly by $50 for every $1,000 (or part of a $1,000) by which their adjusted gross income (AGI) exceeded $110,000. (The threshold was $55,000 for married couples filing separately, and $75,000 for unmarried taxpayers.) [...]
Home Mortgage and Home Equity Debt Interest Deduction
Under the Tax Cuts and Job Act, the limit on acquisition debt is reduced to $750,000 ($375,000 for a married taxpayer filing separately). The $1 million pre-TCJA limit applies to acquisition debt incurred before Dec. 15, 2017 and to debt arising from refinancing pre-Dec. 15, 2017 acquisition debt to the extent the debt resulting [...]
Tax Deduction Guide For Gluten-Free Products
Maintaining a gluten-free food diet is oftentimes more expensive than its gluten containing counterparts, but did you know you might be eligible for a tax deduction to help make up the difference? People diagnosed with celiac disease may be able to receive tax deductions for expenses associated with gluten-free foods and products. However, there [...]
Home Office Expense Deduction For A Self-Employed Taxpayer
If you're self-employed and work out of an office in your home, and if you satisfy the strict rules (discussed below), you will be entitled to favorable “home office” deductions—that is, above-the-line business expense deductions—for the following: • The “direct expenses” of the home office—for example, the costs of painting or repairing the home [...]