In: Accounting
There have been significant changes to personal and non business deductions starting january 1,2018.
these are:
-mortgage interest deduction
-home equity interest
-state and local tax deductions
-casualty losses
-charitable contributions
-medical expenses
-alimony
-miscellaneous itemized deductions
What are the changes in tax law from tax year 2017 to 2018, and what these changes mean to the economy in general ?
please provide provide explanation for the items listed above.
Mortgage interest deduction | 2018 | 2017 |
Interest payments are deductible on mortgage debt of up to | 750000 | 1000000 |
Married couples filing separately can deduct interest on up to (each) | 375000 | 500000 |
Home equity interest | ||
Deduction for other home equity debt (HELOCs and second mortgages) | Eliminated | 100000 |
State and local tax deductions | ||
Taxpayers who itemize can deduct their state individual income, sales and property taxes up to a limit of | 10000 | Unlimited |
Either individual income taxes or sales taxes can be deducted | ||
Casualty losses | ||
Deduct losses not reimbursed or reimbursable by insurance or other means. You'll need to subtract $100 from each casualty loss of personal property. The total of your casualty and theft losses on personal property must be more than 10% of your adjusted gross income (AGI) | ||
The itemized deduction for personal casualty and theft losses is suspended | ||
Charitable contributions | ||
The standard deduction for singles | 12000 | 6350 |
The standard deduction for married couples | 24000 | 12700 |
Medical Expenses | ||
Medical costs are deductible only after they exceed 7.5 percent of your Adjusted Gross Income (AGI) in 2017 and 2018 | ||
Alimony | ||
Deductions are eliminated | ||
Considered as Income to the recepient | ||
Miscellaneous itemized deductions | ||
Deductions Subject to the 2% Limit of Adjusted Gross Income (AGI) |