Last year, new tax reform legislation was passed. That means your 2018 tax returns could be a lot different than recent years. Here are some things to keep in mind, according to Intuit and TurboTax, as you prepare to get your taxes filed.
Healthcare Penalty Eliminated
If you don’t have health insurance, you will no longer need to pay the penalty. Additionally, you can now deduct medical expenses that cost more than 7.5% of your adjusted gross income.
Tax Brackets Have Changed
The new tax brackets are 10% ($0 - $18,650), 12% ($18,651 - $75,900), 22% ($75,901 - $153,100), 24% ($153,101 - $233,350), 32% ($233,351 - $461,700), 35% ($416,701 - $470,700), and 37% (more than $470,000).
Child Tax Credit is Going Up
The child tax credit has now doubled. That means you can deduct $2,000 per child with income caps of up to $400,000. Additionally, a new non-refundable credit of $500 is available for dependents other than children.
The Standard Deduction Has Increased
Single taxpayers will get a $12,000 deduction while joint filers will get a $24,000 deduction. This is intended to help families do less itemizing.
Changes to Property Taxes and Mortgage Interest Payments
Taxpayers can now only deduct $10,000 for property taxes. Plus, the cap for interest deductions has been changed to include loans of $750,000 or less. You can no longer deduct interest on home equity loans.
Want to get more details about these and other upcoming changes to tax law? Check out TurboTax and their article 2018 Tax Reform Impact: What You Should Know. Have a Rivermark account? You can save up to $15 on TurboTax. You’re also welcome to stop by any branch or give us a call at 503.626.6600 or 800.452.8502 to talk about your financial needs.