As you begin to file your taxes, there are some rule changes that you might not know about!
Tax and retirement planner Stuart Pearl, with Southern CT Tax Group, joined Good Morning Connecticut at Nine to explain the pros and cons of the rule changes.
The wide sweeping tax law changes that kick in for tax year 2018 are both good and bad.
- The Standard deduction almost doubles to $12,000 for individual and $24,000 for joint filers. In theory will simplify tax filing paperwork.
- Reduced tax brackets.
- Doubled the child tax credit to $2,000 for each dependent child under age 17.
- IRA 2018 contributions remain at $5500/6500 if over age 50–2019 increase limits to $6,000/$7,000 if over 50.
- Limits on itemized deductions. The big one being discussed is on mortgage interest can only be deducted on on qualified loans of up to $750,000.
- Mortgage interest is no longer deductible for home equity loans or lines unless they are used to buy, build or improve the home that secures the loan.
- SALT (state and local income and property tax) deduction is capped at $10,000.
- Deductions for moving expenses, tax preparation, investment fees and unreimbursed employee expenses are no longer deductible.
Watch the video above for more details.