Happy New Year!

You may have the new tax code figured out but I sure don't!!

As we bid 2017 adieu, we send our heartfelt and grateful thanks for making this an incredible year of change and progress.  You, our faithful supporters, have helped change the course of countless lives and communities.  What a team!

We've been following the Tax Cuts and Jobs Act (TCJA) closely knowing it will impact charities such as HealthEd Connect.  We thought you might find the explanation provided by the Truman Heartland Community Foundation (below) helpful in answering the question, "What is likely to be the impact of TCJA on me next year?"

1. Rates - The current seven rates are slightly reduced for most taxpayers. The seven TCJA rates range from 10% to 37%. The 37% bracket applies to taxpayers with income over $600,000 if married and $500,000 if single.

1. Capital Gains - The capital gains rules have largely been retained. The rate is 0% for low income taxpayers, 15% for those in the 22% or higher income tax bracket and 20% for married couples with income over $480,050 and single individuals with income over $426,700. There also is a 3.8% Medicare tax on capital gains for upper-income taxpayers.

1. Standard Deductions - TCJA nearly doubles the standard deduction for 2018. The standard deduction will be $24,000 for married couples and $12,000 for single individuals. The personal exemptions are repealed.

1. Mortgage Interest - Homeowners may deduct interest for new loans up to $750,000 on first and second homes. Existing mortgages up to $1 million will be grandfathered.

1. State and Local Taxes - Taxpayers may deduct up to $10,000 per year in combined property, state income and local income taxes. There is an option to substitute state sales tax for state income tax.

1. Medical Expenses - The deduction is expanded by reducing the floor to 7.5% of adjusted gross income for 2017 and 2018. The medical expense floor will be 10% starting in 2020.

1. Alternative Minimum Tax (AMT) - The 2018 AMT exemptions are increased to $109,400 for married couples and $70,300 for single taxpayers.

1. Child Tax Credits (CTC) - The CTC is increased to $2,000 per child under age 17. There is a $1,400 portion of the credit that is refundable.

Washington News, Published December 22, 2017