What I love most about my role as a trusted advisor and wealth strategist is being able to help my clients navigate their way to optimum financial health. That means understanding the latest laws and their impact as well as structuring new plans for protecting the integrity of their investments and financial decisions along the way.
Effective January 1st, 2018, here are a few highlights of the new tax bill:
- The bill keeps deductions for charitable contributions, property taxes, mortgage interest, and retirement savings. It limits the deduction on mortgage interest to the first $750,000 of the loan.
- State Taxpayers can deduct up to $10,000 in state and local taxes. They must choose between property taxes and income or state taxes.
- Those paying alimony will lose their deduction, but those receiving alimony will no longer be taxed on the income. This change begins in 2019 for divorces signed in 2018.
- Interest on home equity lines of credit can no longer be deducted. Current mortgage-holders aren't affected.
- It allows taxpayers to deduct medical expenses that are 7.5 percent or more of income.
- It doubles the standard deduction for everyone. A single filer's deduction increases from $6,350 to $12,000. The deduction for Married and Joint Filers increases from $12,700 to $24,000.
- The bill repeals the Obamacare tax on those without health insurance.
- It eliminates personal exemptions. Taxpayers currently subtract $4,150 from income for each person claimed.
- The bill doubles the estate tax exemption to $11.2 million for singles and $22.4 million for couples.
- It keeps the Alternative Minimum Tax. It increases the exemption from $54,300 to $70,300 for singles and from $84,500 to $109,400 for joint.
- It lowers the maximum corporate tax rate from 35 percent to 21 percent. Clients who are sole proprietors (Schedule C) may consider forming an entity in 2018. See below for information on how Laguna Legal can help you set up your new Corporation or LLC.
Got questions? I’d welcome the opportunity to discuss the latest tax bill changes and its potential impact on your comprehensive financial plan with you. Let’s talk strategy… email Bart@zandbergengroup.com.