by Sam Sentelle
Todd A. Lovins
Federal tax changes reviewed
February 6, 2018
With major changes now in place in the federal tax code, accountant Todd Lovins is eager to move into his new office for Ford & Sweeney on Teays Valley Road. The revisions were signed into law on December 22nd, and Lovins was ready today to answer questions about the changes for Putnam Rotarians during their weekly luncheon meeting.
Standard deductions nearly double for 2018: The deduction for singles will increase from the current $6,350 for 2017 to $12,000; couples filing jointly will jump from 12,700 to $24,000. Before the change and without itemizing, the standard deduction was $6,350 for single taxpayers and $12,700 for couples filing jointly. Deduction for the head of household in tax year 2017 was $9,350.
For tax year 2018 these will change to $12,000 for singles and $24,000 for joint filings. Heads of the household will get a deduction of $18,000.
Most itemized deductions will end for 2018.
Deductions on state and local taxes for 2018 will be limited to $10,000, and mortgage interest deductions have been reduced for some new homes.
“The child tax credit is still there,” he said. “It goes from $1,000 to $2,000. The cutoff for marrieds filing jointly is increased from $110,000 to $400,000.” Realtors and sales people who now claim milage as a deduction will no longer be able to claim milage next year. Although the standard deduction increases, the loss of a mileage deduction could push the net income into a higher tax bracket.
“Starting this week — or maybe last week — payroll tables have changed,” he said, “so that exemptions will reflect your net income. Most of us will see some sort of a raise, if not on last paycheck [then] on this paycheck. “That raise is coming from a cut in federal taxes.” Lovins distributed charts which indicated changes from the current law to tax year 2018: The number of brackets remain at seven, but thresholds are revised and percentage for tax at each threshold also changed except for brackets one (10 percent) and six (35 percent).
Thresholds have increased for brackets one through three, and dropped for four through six. The thresholds for bracket seven increased, but the percentage for this highest bracket drops from 39.6 percent to 37 percent.