Friday News / Monday Blues

What this means: Net unearned income above the $2,200 threshold is now taxed at the trusts and estates tax rate rather than the parents’ top marginal rates.

What this means: For corporations that own less than one-fifth of another company’s shares, the dividends received deduction is reduced from 70 to 50 percent. For corporations that own up to 80 percent of another company’s shares, the dividends received deduction is reduced from 75 to 65 percent.

What this means: Although the limits on charitable contributions write offs are not black and white, the general 50% AGI limit has increased to 60%.

What this means: Previously, the maximum amount of mortgage debt eligible for the deduction was $1 million. For mortgages starting after December 14, 2017, only mortgage debts under $750,000 will be eligible for this deduction.

What this means: If you have dependents who are over the age of 16, you are eligible for a new $500 tax credit.

What this means: For taxpayers whose divorce or separation agreements were finalized after December 31, 2018, their alimony payments are no longer deductible on tax returns.

What this means: For taxpayers whose divorce/separation agreements were finalized after December 31, 2018, alimony received payments are no longer taxable and do not have to be included in their taxable income.

What this means: In order to determine how much NOL will be applied to the current tax year and how much will carry forward, taxpayers are required to make certain adjustments to their taxable income. Businesses are now limited to deducting no more than 80% of their taxable income for losses arising after December 31, 2017.

What this means: As of Jan. 1, 2018, the corporate income tax rate is now 21%, down from 35%.

What this means: Prior to the 2018 tax year, taxpayers who relocated for a new job or transferred to a new location could deduct moving expenses from their overall tax liability. After the TCJA was passed, the moving expense deduction became available only to certain military personnel.

What this means: The Child Tax Credit has increased from $1,000 to $2,000 per child.

What this means: All personal and dependent exemptions have been suspended for tax years 2018-2025. Prior to the TCJA, taxpayers could claim an exemption for themselves, their spouse, and their dependents. Each exemption lowered taxable income by $4,050 under pre-TCJA law.

What this means: Wider tax brackets and lower rates equals less tax paid on the same dollar amount.

What this means: Whereas previously there was no limit, state and local taxes are now limited to $10,000 when you itemize your deductions.

What this means: Some taxpayers may be able to deduct more of their total itemized deductions if their deductions were limited in the past because their income was above certain levels.

What this means: Previously, taxpayers could deduct the amount of their miscellaneous itemized deductions that exceeded 2% of their adjusted gross income. These expenses are no longer deductible (until 2025).

What this means: If you sold your primary residence in the prior tax season, you may be eligible for $500,000 of gain exclusion ($250,000 for non-joint filers).