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Proposed Income Tax Reform for 2018 Tax Returns Filed in 2019

Important: We will update our 2018 Tax Reform Calculator as changes are decided regarding tax reform.

2017 Proposed Income Tax Reform

As the saying goes, The Only Thing Constant Is Change. There is a lot of change being proposed to our current tax code. Tax reform is a hot topic, and there are many questions and uncertainties surrounding it.  While the details around tax reform changes almost daily, we have attempted to provide the latest information that we have that could affect your tax return in the future. Here is the latest bill that was introduced and gives the details about the changes being proposed for 2018 Tax Returns filed in 2019

View the Latest Tax Reform Bill Introduced on November 2, 2017

Brief Summary on What is Changing in the Proposed Tax Reform

Here are the things that are increased or eliminated from the current tax code: 

Reduce the Tax Brackets to Four

The brackets are reduced from seven (10%, 15%, 25%, 28%, 33%, 35%, 39.6%) to four (12%, 25%, 35%, 39.6%).

Double the Standard Tax Deduction

The standard deduction amount is increased from $6,350 to $12,000 for single filers, $12,700 to $24,000 for married joint and widow filers, and $9,350 to $18,000 for Heads of Household. 

Increase the Child Tax Credit and Add the New Family Tax Credit

The Child Tax Credit is increased from $1,000 to $1,600 per child (first $1,000 is refundable). There is also a new Family Tax Credit of $300 for non-child dependents and parents and a $300 flexibility tax credit per spouse for the next five years in a Married Filing Jointly tax return.

Eliminate Most Itemized Tax Deductions

All itemized deductions will be eliminated except:

  • Home Mortgage Interest Tax Deductions for new loans up to $500,000 (current homeowners will be carried over to current tax code rules)
  • Investment Interest Expense Tax Deduction
  • Real Estate Tax Deduction up to $10,000
  • Tax Deductions for Charitable Contributions

Reduce the State and Local Tax Deduction 

State and local property taxes up to $10,000 can be deducted, but no income or sales taxes.

Eliminate Other Tax Deductions and Taxes

  • Student Loan Interest Deduction
  • Medical Tax Deductions
  • Alternative Minimum Tax (AMT)
  • Estate or "Death" Tax: increased from $5.49 million to $10 million for individuals and will be eliminated after 6 years

What is Not Changing in the Proposed Tax Reform?

Here are some items from the current tax code that will not change: 

  • Earned Income Tax Credit
  • American Opportunity Tax Credit
  • 401K and IRA Retirement Savings Options
  • Capital Gains and Dividend Rates

Proposed Tax Reform Individual Tax Rate Schedule

Tax Rate Single Married/Joint
& Widow(er)
Married/Separate Head of Household
12% $1 to $45,000 $1 to $90,000 $1 to $45,000 $1 to $67,500
25% $45,000 to $200,000 $90,000 to $260,000 $45,000 to $200,000 $67,000 to $230,000
35% $200,000 to $500,000 $260,000 to $1,000,000 $200,000 to $500,000 $230,000 to $500,000
39.6% over $500,000 over $1,000,000 over $500,000 over $500,000

Single

12% | $1 to $45,000
25% | $45,000 to $200,000
35% | $200,000 to  $500,000
39.6% | over $500,000

 

Married/Joint & Widow(er)

12% | $1 to $90,000
25% | $90,000 to $260,000
35% | $260,000 to $1,000,000
39.6% | over $1,000,000

 

Married Separate

12% | $1 to $45,000
25% | $45,000 to $200,000
35% | $200,000 to $500,000
39.6% | over $500,000

 

Head of Household

12% | $1 to $67,500
25% | $67,500 to $230,000
35% | $230,000 to  $500,000
39.6% | over  $500,000

Still confused? We don’t blame you! To help you see the details of the proposed tax reform and how it might affect you, you can estimate your tax return with the above proposed changes by using our Tax Reform Calculator below. The Tax Reform Calculator will estimate high level details of your Tax Return and any estimated tax refund, or taxes owed, on your return.

View the Latest Tax Reform Bill Introduced on November 2, 2017

1 Please Remember: Currently tax reform is NOT law, and has not been put in place. The above details are what is being discussed and could change drastically in the upcoming months. We will update this page as tax reform progresses and new details are available.