First, for tax years beginning Januand ending before January 1, 2026, the percentage limitation for cash contributions to public charities increased from 50% to 60% of adjusted gross income. Under the TCJA two modifications were made to the charitable contribution rules. The interest from home equity loans used for personal reasons are no longer deductible (such as paying off student loans, paying off credit card debt, paying educational expenses, taking vacations, purchasing a vehicle, etc.). Under the TCJA, the home equity interest deduction is suspended, unless it is used to buy, build, or substantially improve the taxpayer’s home that secures the loan. The $1 million limitation still applies to taxpayers who enter into a binding contract before December 31, 2017, who close on the purchase before January 1, 2018, and purchase the residence before April 1, 2018. ($375,000 for Married Filing Separately). The deduction for the interest paid on acquisition indebtedness decreased from $1 million to $750,000 for Married Filing Joint. The itemized deduction for mortgage interest after the TCJA has been reduced for the tax years after Decemthrough the year ending 2025. The TCJA also suspended the deduction for foreign real property taxes through 2025. The combined itemized deductions for state and local real property taxes, state and local personal property taxes, and state and local income or sales taxes for tax years, beginning after Decemthrough the year ending 2025, may not exceed $10,000 for Married Filing Joint and $5,000 for married individuals filing separately. For AMT purposes, the 10% threshold was applicable to all taxpayers. Prior to the TCJA, the 7.5% was only available for taxpayers over the age of 65, while younger taxpayers had a 10% threshold. This applies to both regular tax and alternative minimum tax (AMT). The medical expense deduction threshold was temporarily lowered to 7.5% of adjusted gross income for all taxpayers itemizing their deductions in 20. This amount increases to $1,600 if the taxpayer is unmarried. This now includes an additional $1,300 deduction for both the taxpayer and spouse who are over the age of 65 and/or blind. ![]() The additional standard deduction for the elderly and the blind was retained. The deduction is indexed for inflation in future years beginning after December 31, 2018. Married individuals filing a join return have a standard deduction of $24,000, Head-of-household filers standard deduction is $18,000, and all other taxpayers have a standard deduction of $12,000. The standard deduction has increased for each filing status. The choice in deciding whether to itemize or apply the standard deduction has not changed with The TCJA. ![]() Listed below are summaries of the Standard Deduction and Itemized Deductions that were changed by the TCJA. It is important to know how these changes will affect individuals during the current tax year. Also, many of the provisions expire at the end of 2025 at which time the rules will revert back to pre-2018 law. Several of the individual tax provisions are temporary. ![]() The Tax Cuts and Jobs Act (TCJA) has changed some tax provisions, effective in 2018.
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