5 Tax Reform Changes To Know Before Filing Your 2018 Tax Return

Tax reform affects every person’s tax return in 2018. Before you file this tax season, here’s what you need to know about the tax law adjustments to be prepared.


1. The tax rates changed for everyone.
The tax rates you previously knew are no more. Almost every rate has changed in 2018. In fact, the entire bracket for each filing status was adjusted. Here’s what they look like now:


2. The standard deduction nearly doubled.
Another major tax reform change included increasing the standard deduction for every filing status. The standard deduction is a pre-set dollar amount that reduces your taxable income. When you file your tax return, you can choose to claim the standard deduction or itemize your deductions.2. The standard deduction nearly doubled.

3. Miscellaneous deductions were suspended.
If you itemized deductions in the past, don’t expect to deduct miscellaneous expenses this year. Any miscellaneous itemized deductions that exceeded two percent of your adjusted gross income (AGI) were suspended as part of tax reform. That includes expenses like unreimbursed employee expenses, safe deposit fees, investment management fees, and union dues.3. Miscellaneous deductions were suspended.


4. Personal deductions were eliminated.
You can no longer claim a personal exemption deduction for yourself, your spouse, or any dependents. That means you can’t reduce your taxable income using the personal exemption like you could in previous years. In 2017, the personal exemption was $4,050.


5. The State and Local Tax deduction is capped at $10,000.
Most state and local income taxes are still deductible as itemized deductions. However, the amount you can deduct in one year is now capped at $10,000. That means you can deduct up to $10,000 in property and income tax or sales tax on Schedule A. Previously, the deduction was unlimited.

Single filers and those married filing jointly are both subject to the $10,000 limit. The cap for a married person filing separately is $5,000.

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