The Internal Revenue Service has made inflation adjustments for 2018 to accommodate changes in the tax code for the Tax Cuts and Jobs Act. The changes will apply to 2018 returns filed in 2019.
The top items for 2018 returns include:
• The standard deduction for married couples filing jointly increases to $24,000. The deduction for single taxpayers and married people filing separately increases to $12,000. The deduction for heads of households is $18,000.
• The personal exemption drops to $0 under the jobs act.
• New rates for taxpayers dropped to 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The highest rate applies to married taxpayers filing jointly and to surviving spouses with taxable incomes exceeding $600,000. The rate also applies to single people and heads of households with incomes exceeding $500,000 and to married taxpayers filing separately with incomes above $300,000.
• The jobs act does away with limitations for itemized deductions.
• The jobs act significantly increases the exemption amount for the Alternative Minimum Tax. The single taxpayer's exemption is $70,300; it begins to phase out at $500,000. For married couples filing jointly, the exemption is $109,400 and begins phasing out at $1 million.
• The exclusion for estates of people who die in 2018 is $11,180,000.
Other details may apply, and you can find more information on the IRS website.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.
Tip adapted from IRS.gov