Navegó a una página que no está disponible en español en este momento. Seleccione el enlace si desea ver otro contenido en español.

Página principal

What’s New This Year

Every year, laws can change and affect your tax situation. No doubt you’re aware of a December 2017 tax law that makes sweeping changes, many of which took effect in 2018. Here are some notable items:

  • Tax rates – Income tax rates are generally lower, with the highest rate on ordinary income dropping from 39.6% to 37%.
  • Standard deduction and itemized deductions – Some itemized deductions are eliminated or subject to new limits, while the standard deduction is increased. For example, the itemized deduction for state and local tax paid is now limited to $10,000 ($5,000 if married filing separately), and certain "miscellaneous" deductions, including certain investment expenses, employee business expenses and tax return preparation costs, are not available. A rule that reduced overall itemized deductions for certain individuals at higher income levels no longer applies. Many taxpayers who previously itemized will begin claiming the standard deduction in 2018.
  • Personal exemptions – The deduction for personal exemptions is eliminated, but taxpayers receive an enhanced child credit.
  • Alternative minimum tax ("AMT") – Changes to this added tax previously paid by some 5 million taxpayers will make it far less prevalent. This revised version is estimated to apply to only about 200,000 taxpayers.
  • Kiddie tax – Rules for taxing investment income of minors and certain young adults have changed, generally applying income tax rates that otherwise apply to trusts and estates, rather than applying the parents’ tax rates as under prior law.
  • Roth conversions – Individuals who convert traditional retirement accounts to Roth IRAs will no longer have the option to undo those conversions later.
  • Alimony – Effective for divorce or separation agreements entered into or modified after 2018, alimony payments will no longer be deductible by the payer or included in income of the recipient.
  • Tax Forms - In addition, the IRS has eliminated the Forms 1040EZ and 1040A. The process of preparing returns using software will not be greatly affected, but the printed return will look quite different.

Talk to your tax advisor for more details.

Last updated on December 31, 2018