Taxes Simplified - Changes in Tax Code

What's New for 2018 filing taxes on 2019!

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Standard deduction amount increased.

For 2018, the standard deduction amount has been increased for all filers, and the amounts are as follows.

  • Single or Married Filing Separately—$12,000.
  • Married Filing Jointly or Qualifying Widow(er)—$24,000.
  • Head of Household—$18,000.

Due to the increase in the standard deduction and reduced usage of itemized deductions, you may want to consider filing a new Form W-4.


Deduction for personal exemptions suspended.

For 2018, you can’t claim a personal exemption deduction for yourself, your spouse, or your dependents.


Changes to itemized deductions.

For 2018, the following changes have been made to itemized deductions that can be claimed on Schedule A.

  • Your itemized deductions are no longer limited if your adjusted gross income is over a certain amount.
  • You can deduct the part of your medical and dental expenses that is more than 7.5 percent of your adjusted gross income.
  • Your deduction of state and local income, sales, and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if married filing separately).
  • You can no longer deduct job-related expenses or other      miscellaneous itemized deductions that were subject to the 2 percent of      AGI floor. You may still deduct certain other items on Schedule A, such as gambling losses.
  • For indebtedness incurred after December 15, 2017, the      deduction for home mortgage interest is limited to interest on up to $750,000 of home acquisition indebtedness. This new limit doesn’t apply if  you had a binding contract to close on a home after December 15, 2017, and closed on or before April 1, 2018, and the prior limit would apply.
  • You can no longer deduct interest on home equity indebtedness, which means indebtedness not incurred for the purpose of buying, building, or substantially improving the qualified residence secured by the indebtedness.

Self-employment tax

Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Your payments of SE tax contribute to your coverage under the social security system. Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits.

Generally, you must pay SE tax and file Schedule SE (Form 1040) if either of the following applies.

  • If your net earnings from self-employment were $400 or more.
  • If you work for a church or a    qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from Social Security and Medicare taxes, you are subject to SE tax if you receive $108.28 or more in wages from the church or organization.

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