Top 5 2018 US Tax Return Changes
This is a brief summary of some 2018 US tax return changes that may affect your tax return.
Under the new law, the standard deduction for all taxpayers has increased from 1 January 2018.
This is intended to significantly reduce the number of taxpayers who itemize their deductions.
- State & Local taxes – the amount that you can claim for all state and local sales, income and property taxes may not exceed $10,000 ($5,000 for married filing separately)
- Mortgage Interest – the mortgage interest deduction will be capped at $750,000 for mortgage loan balances taken out after December 15, 2017. The limit is still $1 million for mortgages that were established prior to December 15, 2017.
The personal exemption has been eliminated from 2018 onwards. The increase in the standard deduction and lower tax rates is to compensate for the loss of the deductions for individual exemptions.
The highest US tax rate has been reduced from 39.6% to 37% for 2018 US tax returns.
The estate tax exemption has increased to $11.18 million per individual for 2018 which increases again to $11.4 million from 1 January 2019.
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