Big Changes are Going into Effect in 2018

Law keeps seven tax brackets, but with different rates. Top rate lowered from 39.6% to 37%.

Inflation indexing of income tax brackets and various tax breaks is altered. According to critics, this is a hidden tax hike that over time will nail nearly all individual filers.

Investments:

  • Tax rates on long term capital gains and qualified dividends do not change
  • 0% rate with taxable income under $38,600 on single and $77,200 on joint returns
  • 20% rate starts at $425,800 for single and $479,000 for joint filers
  • 15% rate applies for filers with incomes between those break points

Minimum Tax:

The law keeps the individual alternative minimum tax with higher exemptions

Healthcare:

  • Obamacare‚Äôs individual mandate is on the way out
  • The requirement that persons have health insurance, qualify for an exemption, pay a fine is repealed for post 2018 years
  • The mandate continues to applies for 2018

Tax Credits:

The child tax credit is doubles to $2,000 for each dependent under age 17, up to $1,400 of the credit refundable.

Estates & Trusts:

  • Fewer esate will be subject to the estate tax
  • Congress doubled lifetime estate gift tax exemption to $11 million
  • Rate remains 40%
  • Gift tax exclusion for 2018 is $15,000 per donee

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