No More Personal and Dependent Exemption Deductions:
For 2018-2025, the new tax law eliminates personal and dependent exemption deductions, which would have been $4,150 each for 2018.
More Generous Child Tax Credit Rules:
The new tax law increases the maximum child credit to $2,000 per qualifying child under the age of 17. Up to $1,400 of that can be a refundable credit, which means you can collect that amount even if you don’t owe any federal income tax.
There is also a $500 credit for dependents that are not under the age of 17, have no gross income, have lived with you and received over half of their support for the year from you and are a U.S. citizen, national or resident.
Most importantly, the income level phase-out amounts are significantly increased, so more families with children under the age of 17 will now qualify:
*$400,000 for married filing joint couples (up from $110,000)
*$200,000 for all others (up from $75,000 for singles and $55,000 for married couples filing single)
Bigger Standard Deductions:
For those of you who do not itemize, the standard deductions have doubled to:
$12,000 for singles (up from $6,370)
$24,000 for married couples filing joint (up from $12,700)
$18,000 for heads of households (up from $9,350)
$1,300 additional for over 65 married filing joint
$1,600 additional for over 65 singles
Raskob Kambourian Financial Advisors is an independent, fee-only comprehensive financial advisory firm registered with the Securities and Exchange Commission. We offer expertise, competitive pricing, and personalized financial services to meet your “Life Planning” needs.