Income Tax Changes for 2018

Whether you file Schedule C for business income or just a basic 1040 for your personal taxes, the amendments to the Internal Revenue Code will probably affect your 2018 filing. Here are some highlights:

  • The due date for filing a 2018 return is Monday, April 15, 2019 for most filers. Residents of Maine and Massachusetts have until April 17, 2019, to file Form 1040, because April 15, 2019, is Patriot’s Day and April 16, 2019, is Emancipation Day.

  • Alimony/separate maintenance is no longer deductible by the payor or counted as income by the recipient. However, this will likely not apply to you if you started paying/receiving alimony prior to 2019.

  • U.S. Armed Forces members who served in the Sinai Peninsula of Egypt may qualify for combat zone tax benefits retroactive to June 2015.

  • Personal exemptions are suspended.

  • Standard deductions are increased to $12,000 for single/married filing separately; $18,000 for head of household; and $24,000 for married filing jointly/qualified widow(er). Additional increases apply for senior and blind taxpayers.

  • There is a combined limitation for an individual of $10,000 ($5,000 if Married Filing Separately) on real property taxes, personal property taxes, and income taxes or general sales taxes that are unrelated to a business.

  • Personal casualty and theft loss deductions are suspended unless the loss resulted from a disaster recognized as such by the President.

  • The overall limit on itemized deductions for higher income taxpayers has been suspended.

  • Sole proprietorships, LLC’s, and other pass-through businesses are eligible to deduct up to 20% of their qualified business income.

  • Maximum child tax credit is increased to $2,000 per qualifying child. Other dependents may qualify for a credit up to $500.

For more information, download the IRS Tax Reform Basics Guide.