THIS JUST IN
taxpayers can now file returns claiming:

- Exclusion from gross income of discharge of qualified principal residence indebtedness (often, foreclosure-related debt forgiveness), claimed on Form 982,

- Mortgage insurance premiums treated as qualified residence interest, generally claimed by low- and middle-income filers on Schedule A, and

- Deduction for qualified tuition and related expenses claimed on Form 8917.
Released 20 Dec 2017 Signed into Law 22 December 2017.

Easy to read - A full 8 1/2 inches by 11 inches! Large pages, double space, large text. Plenty of white space to write notes.

Highlights:

Standard deduction has almost doubled for all filers, but personal exemptions have been eliminated.

Single or married taxpayers are not allowed to deduct more than $10,000 of property taxes and state and local income or sales taxes. Some states are considering repealing their income taxes and replacing them with employer-side payroll taxes. Taxes imposed on a business (such as employer payroll taxes) are still deductible under federal law. A business can just write them off their corporate income tax (or individual tax, if the business is a pass-through entity). This would not only totally offset the new limit on deducting state income taxes - it would amount to a sizable tax cut for many middle-class families. Other kinds of income like capital gains, interest, and dividends aren't hit by payroll taxes. Some states will likely pair the payroll tax shift with a new tax on capital income (similar to how Tennessee and New Hampshire tax interest and dividend income). Some states will join them, perhaps adding capital gains. I predict California, New York, New Jersey, Connecticut and Hawaii will implement this in 2018, followed closely by Maryland and Massachusetts.

Small Business Owners, Freelancers and Contract Workers (Gig Workers) The new law changes the way "pass-through" entities (which pass profits directly to their owners as personal income) are treated in the tax code. Now many will be able to deduct 20 percent of their revenue from their taxable income (20 percent off their taxable earnings).

Alternative Minimum Tax Raises the amount of income that would be exempt from AMT. For singles the exemption level will increase to $70,300, and $109,400 for married couples.

Home Mortgage Interest Deduction. If you take out a new mortgage you will only be allowed to deduct the interest on debt up to $750,000.

Child Care Credit - doubled the current child tax credit from $1,000 to $2,000 per child under age 17.

No Miscellaneous Itemized Deductions.

Moving Expenses - You will no longer be able to deduct moving expenses related to a job change.

Alimony Payments will no longer be deductible expense for divorce after 2017. The party receiving the payments would no longer need to pay tax on the income received.

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