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Brief Description of Potential Tax Law Changes for Tax Year 2017 by Intuit (This information can change anytime up to or during Tax Year 2017.)

2018 Tax Law Changes

For tax year 2018, taxpayers are seeing a vast amount of changes.  Some of the most significant ones are outlined below:

Itemized Deductions
  • The deduction for taxes is now limited to $10,000.
  • Unreimbursed employee expenses are no longer tax deductible.  If you use your personal cell phone, purchase uniforms or business cards, pay union dues, etc you can no longer write off those costs.
  • Investment management costs are no longer tax deductible.  Many people pay thousands of dollars for investment account management fees, but they are no longer tax deductible.

Other Dependent Credit
Previously, there was only a tax credit for your children ages 16 and under.  Now there is a $500 credit for other dependents such as your children ages 17+ or your parents.

Personal Exemptions
There are no more personal exemptions.

Started or Continuing in 2017

Estate Tax

For individuals dying after 2016, the federal estate tax is increased to $5.49 million exemption and a 40 percent maximum rate.

Social Security Wage Base

The Social Security wage base remains $127,200.

Individual Responsibility Penalties

Penalties are assessed for each month that any individual does not have the minimum essential health insurance coverage. In 2017 the penalty remains at $695 per adult, or 2.5% of income with a family maximum of $2,085.

Premium Tax Credits for Health Coverage

Some taxpayers who obtain health insurance coverage through a qualified marketplace may qualify for health premium tax credits to subsidize the cost of coverage.

Deduction for State and Local Income Taxes

State and local income taxes remains an itemized deduction.

Exclusion From Income of Canceled Debt on Qualified Principal Residence

Debt cancelled from the short sale, foreclosure, or mortgage modification for Qualified Principal Residences is no longer excludable from income under the Mortgage Forgiveness Debt Relief Act. This was extended to the end of 2016. This could also apply to debt that was discharged in 2017 provided that there was a written agreement entered into in 2016.

Standard Deduction for Head of Household Filers

Standard deductions increase from 2016 levels: Single = $6,350, Married Filing Jointly = $12,700, Married Filing Separately = $6,350, and Head of Household = $9,350.

Personal Exemption Amount Increases

The personal exemption remains $4,050.

Tuition and Fees Deduction

The deduction for tuition and fees is no longer available. The  American Opportunity Credit and Lifetime Learning Credit are both still available to qualified taxpayers.

Deduction for Medical Expenses

Starting in 2017, all taxpayers, including those over 65, are now subject to the 10% of Adjusted Gross Income (AGI) threshold for deducting medical expenses.