Here is a breakdown of how the new tax plan affects individual taxes. All of these start in 2018. In other words, it affects the taxes you will file in 2019, for 2018.
** Here is a link to a form 1040, for reference.
This affects line 40 on your form 1040.
- Increases from $6350 to $12000
- Increases from $12700 to $24000
This affects line 42 on your form 1040.
- Decreases from $4,050 to $0 (single)
- Decreases from $8100 to $0 (MFJ)
CHILD TAX CREDIT
This affects line 52 on your form 1040.
- Increases from $1000 to $2000
- For this credit, parents who don’t earn enough to claim the credit may still get up to $1400. In other words, if you have no tax liability because of your income level, you may still get a partial amount of this credit.
- Income limit to claim this credit increases from $75000 to $200,000 if single and from $110,000 to $400,000 for MFJ filers.
This affects line 21 on your 1040.
- Usually, any forgiven student loan debt is taxable income.
- With the new plan, any student loan debt discharged (forgiven) will not be taxed form 2018 to 2025
SCHEDULE A (ITEMIZATION)
- $10,000 limit is now imposed on taxes that can be deducted on Schedule A, including local, state & property taxes.
- You can no longer deduct the interest on home equity loans.
- You can no longer itemize the following deductions: the cost of tax preparation, investment fees, bike commuting ($20/month) unreimbursed job expenses and moving expenses.
In general, the new tax bill does not affect 2017 taxes. Find out how to avoid owing a large tax bill on 2017 taxes, if you are self-employed. To find out how the new tax law affects you, specifically, consult with a tax professional or accountant.Be Updated: