WHAT’S NEW FOR 2018 TAX FORMS - FEDERAL

There is a multitude of changes to the tax forms and tax law for 2018 on the federal level.

The big change with the federal Form 1040 is that the old well-crafted Form 1040 is replaced with the ridiculous new “postcard” 1040 and 6 new supplementary schedules - probably the stupidest thing I have ever seen in my almost 48 years in the tax preparation business.  There is no 2018 Form 1040A or Form 1040EZ.

As for tax law, here is a comparison of 2018 and 2017 tax law to show some of what is new for individual income taxes 2018.

ITEM	2018 TAX LAW	2017 TAX LAW
TAX RATES	10%, 12%, 22%, 24%, 32%, 35%, 37%	10%, 15%, 25%, 28%, 33%, 35%, 39.6%
STANDARD DEDUCTION	Single- $12,000 Married Joint- $24,000 Married Separate- $12,000 Head of House- $18,000	Single- $6,350 Married Joint- $12,700 Married separate- $6,350 Head of House- $9,350
PERSONAL EXEMPTION	No deduction for personal exemptions.	$4,050
ALIMONY	Deductible by payer and included in income of recipient.	Deductible by payer and included in income of recipient.
MOVING EXPENSE	Deduction for military moves only.	Deduction for job-related moves.
MEDICAL EXPENSES	Allowed in excess of 7½ % of AGI.	Allowed in excess of 7½ % of AGI.
TAXES	Combined deduction limited to $10,000 ($5,000 if filing separate).	Full deduction for all state and local income or sales taxes, property taxes, and personal property taxes.
MORTGAGE INTEREST	Only interest on acquisition debt of up to $500,000 is deductible. Grandfathering for existing loans of up to $1 Million of debt.	Interest on acquisition debt of up to $1 Million and home-equity debt of up to $100,000 deductible.
INVESTMENT INTEREST	Deductible to extent of investment income.	Deductible to extent of net investment income.
CHARITABLE CONTRIBUTIONS	Fully deductible up to 60% of AGI.	Fully deductible up to 50% of AGI.
CASUALTY AND THEFT LOSS	Only casualty losses from Presidentially-declared disaster areas are deductible.	All casualty and theft losses are deductible.
EMPLOYEE BUSINESS EXPENSES	Not deductible.	Deductible to extent total miscellaneous expenses exceeds 2% of AGI.
INVESTMENT EXPENSES	Not deductible.	Deductible to extent total miscellaneous expenses exceeds 2% of AGI.
TAX PREPARATION COSTS	Not deductible.	Deductible to extent total miscellaneous expenses exceeds 2% of AGI.
LEGAL FEES RELATED TO INCOME	Not deductible.	Deductible to extent total miscellaneous expenses exceeds 2% of AGI.
GAMBLING LOSSES	Deductible to extent of reported winnings.	Deductible to extent of reported winning.
TOTAL ITEMIZED DEDUCTIONS	Deducted in full – no limitation.	Deduction limited based on AGI.
CHILD TAX CREDIT	Up to $2,000 for each child under age 17, based on AGI. AGI threshold substantially increased. Up to $1,400 is refundable.	Up to $1,000 for each child under age 17, based on AGI.  Full amount deductible.
DEPENDENT CREDIT	Up to $500 for each dependent not eligible for the Child Tax Credit, based on AGI (same threshold as Child Tax Credit). No credit for taxpayer or spouse.	Does not exist.  No credit allowed.
SHARED RESPONSIBILITY PENALTY	Adequate health insurance coverage required for entire household.	Adequate health insurance coverage required for entire household.
ALTERNATIVE MINIMUM TAX EXEMPTION	Single/Head of House- $70,300 Married Joint- $109,400 Married Separate- $54,700	Single/Head of House- $54,300 Married Joint- $84,500 Married Separate- $42,250
ALTERNATIVE MINIMUM TAX EXEMPTION PHASE OUT BEGINS	Single/Head of House- $500,000 Married Joint- $1 Million Married Separate- $500,000	Single/Head of House- $120,700 Married Joint- $160,900 Married Separate- $80,450
KIDDIE TAX	Calculated separately using tax rate schedule for estates and trusts.	Calculated based on income of parents.

Information on what is new for 2018 for New Jersey and New York to follow.

TTFN