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2018 Tax Bill Overview

2018 Tax bill changes

2018 Tax Bill Changes Overview

Thinking about the 2018 tax bill in neither a fun nor an easy to understand topic.  However, it is something that affects all of us.
I hope that the overview below comparing the 2017 rules to the 2018 tax bill will help you make the information more manageable.

One quick disclaimer: Laura Borja, Mann Mortgage and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide , and should not be relied on for, tax, legal or accounting advice. You should consult with your own tax, legal and accounting advisors before engaging in any transaction.

Standard Deduction/Personal Exemptions

2017 Rules/Tax Schedule
NEW 2018 Rules/Tax Schedule
  • Personal Exemption of $4,150 with phase outs for higher incomes
  • Standard Deduction
    • Single - $6,500
    • Married Filing Jointly - $13,000
    • Married filing separately - $6,500
    • Head of Household - $9,350

 

  • Personal Exemption - Eliminated
  • Standard Deduction
    • Single - $12,000
    • Married Filing Jointly - $24,000
    • Married filing separately - $12,000
    • Head of Household - $18,000

 

Itemized Deductions

2017 Rules/Tax Schedule
NEW 2018 Rules/Tax Schedule
  • Itemized deductions allowed with reductions at income levels starting at $320,000 (married) and $256,700 (single)

 

 

  • Individual deduction  for state and local taxes (SALT) for income, sales and property is limited in the aggregate to $10,000 (married and single and $5,000 married filing separately)
  • Most miscellaneous itemized deductions that were subject to 2% AGI floor will no longer be allowed (e.g. unreimbursed business expenses, tax preparation and investment expenses)

Mortgage Interest

2017 Rules/Tax Schedule
NEW 2018 Rules/Tax Schedule
  • Principal Residence and second home mortgages up to $1,000,000 (married) or $500,000 (single)
  • HELOC up to $100,000

 

 

 

  • Principal Residence and second home mortgages up a combined $750,000
    • Pre 12/16/2017 mortgages are grandfathered and new purchase money mortgages may be grandfathered if the purchase contract is dated before 12/16/17 (there are additional conditions)
    • Refinancing of grandfathered mortgages are grandfathered, but not beyond the original mortgage's term/amount (some exceptions apply on balloon mortgages)
  • HELOC interest no longer be tax deductible(Variable rules apply, check with your tax advisor)

Capital Gains

2017 Rules/Tax Schedule
NEW 2018 Rules/Tax Schedule

Maximum tax rate on long term capital gains is 20%

Unchanged

Capital Gains Exclusion for Primary Residence

2017 Rules/Tax Schedule
NEW 2018 Rules/Tax Schedule

Sale of a primary residence allows exclusion of gains of up to $500,000 (married) if 2 of 5 year rule is met

Unchanged

 

Like-Kind Exchanges (1031 exchange)

2017 Rules/Tax Schedule
NEW 2018 Rules/Tax Schedule
  • Allows for the disposal of an asset and the acquisition of another replacement asset without generating a current tax liability for the gain on the sale of the first asset.
  • Applies to like-kind exchanges of real property as well as certain categories of personal properties.
  • Limits the applicability to the like-kind exchanges of real property that is not held primarily for sale
  • This does NOT expire in 2025

 

 

Individual/ Joint Tax Rates

2017 Rules/Tax Schedule
NEW 2018 Rules/Tax Schedule
Marginal Tax Rate Single

Married Filing

Jointly

10% $0-$9,325 $0-$18,650
15% $9,325-$37,950 $18,650-$75,900
25% $37,950-$91,900 $75,900-$153,100
28% $91,900-$191,650 $153,100-$233,350
33% $191,650-$416,700 $233,350-$416,700
35% $416,700-$418,400 $416,700-$470,700
39.6% Over $418,400 Over $470,700
Marginal Tax Rate Head of Household Married Filing Separately
10% $0-$13,350 $0-$9,325
15% $13,350-$50,800 $9,325-$37,950
25% $50,800-$131,200 $37,950-$76,550
28% $131,200-$212,500 $76,550-$116,675
33% $212,500-$416,700 $116,675-$208,350
35% $416,700-$444,500 $208,350-$235,350
39.6% Over $444,500 Over $235,350
Marginal Tax Rate Single Married Filing Jointly
10% $0-$9,525 $0-$19,050
12% $9,525-$38,700 $19,050-$77,400
22% $38,700-$82,500 $77,400-$165,000
24% $82,500-$157,500 $165,000-$315,000
32% $157,500-$200,000 $315,000-$400,000
35% $200,000-$500,000 $400,000-$600,000
37% Over $500,000 Over $600,000
Marginal Tax Rate Head of Household Married Filing Separately
10% $0-$13,600 $0-$9,525
12% $13,600-$51,800 $9,525-$38,700
22% $51,800-$82,500 $38,700-$82,500
24% $82,500-$157,500 $82,500-$157,500
32% $157,500-$200,000 $157,500-$200,000
35% $200,000-$500,000 $200,000-$300,000
37% Over $500,000 Over $300,000

Hope this comparison overview of the 2018 tax bill helps you to better understand how the changes might affect you. Remember, contact your legal or tax advisor for more information about how the 2018 tax bill will affect your tax liability.

If you have any questions about any mortgage or real estate related topic, by all means reach out to me.
Send me an email
Give me a call - (858) 3-LOAN-SD
Text LOANINFO to 44222
Connect with me on Social Media.Laura Borja on Social Media

 

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