Proposed Tax Changes

New proposed tax changes

 

Tax rates:

       Single

Taxable income over

But not over

Is taxed at

$0

$45,000

12%

$45,000

$200,000

25%

$200,000

$500,000

35%

$500,000

 

39.6%

 

          Married Filing Joint and Surviving Spouse

Taxable income over

But not over

Is taxed at

$0

$90,000

12%

$90,000

$260,000

25%

$260,000

$1,000,000

35%

$1,000,000

 

39.6%

 

          Married Filing Separate

Taxable income over

But not over

Is taxed at

$0

$45,000

12%

$45,000

$130,000

25%

$130,000

$500,000

35%

$500,000

 

39.6%

          Head of Household

Taxable income over

But not over

Is taxed at

$0

$67,500

12%

$67,500

$200,000

25%

$200,000

$500,000

35%

$500,000

 

39.6%

 

          Estates and Trusts

Taxable income over

But not over

Is taxed at

$0

$2,550

12%

$2,550

$9,150

25%

$9,150

$12,500

35%

$12,500

 

39.6%

 

Capital Gain Rates:

 

Single and Married Separate

Taxable income over

But not over

Is taxed at

$0

$38,600

0%

$38,600

$239,500

15%

$239,500

 

20%

 

 

 

 

Married Filing Joint

Taxable income over

But not over

Is taxed at

$0

$77,200

0%

$77,200

$479,000

15%

$479,000

 

20%

 

Head of Household

Taxable income over

But not over

Is taxed at

$0

$51,700

0%

$51,700

$452,400

15%

$452,400

 

20%

 

 

 

 

Standard Deductions:

Single                           $12,200

Married Filing Joint       $24,400

Head of Household       $18,300

 

Adjustments and Itemized Deductions Removed

  • Alimony (1040)
  • Teachers Expenses (1040)
  • Performing Artists (1040)
  • Student Loan Interest (1040)
  • Moving Expenses (1040)
  • Medical (Schedule A)
  • Casualty and Theft Loss(Schedule A)
  • State and Local Taxes (Schedule A)
  • Property Taxes (limited to $10,000) (Schedule A)
  • Mortgage Interest on homes purchased after November 2, 2017 is limited to $500,000 (Schedule A)
  • Mortgage interest only on one residence (Schedule A)
  • Job expenses (Schedule A)
  • Tax preparation fees (Schedule A)

Principal Residence - The gain on principal residence is now every five years changing from every two years.

 

Child Tax Credit increases to $1,600 but only the first $1,000 is refundable

 

Family credit of $300 for each non child dependant

 

Education Credits – The AOTC and Lifetime learning credits will be combined to one credit, the first $2,000 of tuition is 100% and the next $2,000 is subject to 25%.  Only the applicable amounts to the AOTC would remain refundable.

 

Misc. income exclusions repealed:

  • Employee achievement awards
  • Dependent Care Benefits
  • Qualified Moving Expense Reimbursements
  • Adoption Assistance Programs
  • Savings bonds used for education
  • Education Assistance by employer

 

Alternative Minimum Tax – Repealed

 

Estate Tax – The estate tax would be repealed after 2023