Soar to Success May 2018

SOAR TO SUCCESS / May 2018 / Core Business Strategies 2017 Tax Reform: Changes that Could Affect Your Tax Bill, Part 3 By Tina Moe, CPA T he new Tax Cuts and Jobs Act is the most sweeping tax reform, or deform, depending on your views, in a very long time. If you haven’t read my articles in the two previous months, you may want to do that. In this article, I’m providing a quick run-down of some additional changes to the tax laws: There is now a limitation on the deduction of mortgage interest on home indebtedness RI IRU PDUULHG ĆOLQJ separate tax payers), down from $1 million dollars under the old law. However, for tax years after December 31, 2025, the prior $1 PLOOLRQ IRU PDUULHG ĆOLQJ VHSDUDWH will be restored. Also, the new lower limit doesn’t apply to any acquisition indebtedness incurred before December 15, 2017. There’s bad news for those of you with 2nd mortgages, interest paid on home equity loans is suspended for the 2018 through 2025 tax years but, it too is slated to be restored in the 2026 tax year. The medical expense deduction threshold is temporarily reduced back down to 7.5% of adjusted gross income for all taxpayers but, the alternative minimum tax limits of 10% won’t apply in the 2018 tax year. Charitable contribution deduction limits have now been increased to 60% for cash