The Tax Cuts and Job Act includes the following changes beginning January 1, 2018 (Note: These changes are only temporary through December 31, 2025):
The Standard Deduction is increased to:
Single - $12,000
Married filing Separately - $12,000
Head of Household - $18,000
Married filing Jointly - $24,000
The Personal Exemption has been replaced by an increased Child Tax Credit ($2,000 per child until the year they turn 17) and a $500 Qualifying Dependent Credit for your dependents that are not eligible for the Child Tax Credit.The income levels to claim these credits has also been increased to $200,000 for Single, Head of Household and Married Filing Separately and $400,000 for Married filing Joint.
Any child claimed for the Child Tax Credit must have a social security number.
Itemized deduction changes:
Moving expenses may only be deducted by active duty military on a permanent change of station.Employees who are reimbursed their 2018 moving expenses by their employers will include any reimbursements as W-2 income.If the 2018 reimbursements are for expenses incurred in 2017, employees may be able to deduct them on their 2018 return.
Business owners may qualify for a
Section 199A deduction. This deduction may be up to 20% of qualified business income depending on the type of business they own.
Entertainment expenses are no longer deductible.
For most businesses, Net Operating Losses may only be carried forward.
2018 PERMANENT FUND DIVIDEND was $1,600. This does mean that children will have to pay taxes on their dividend. A child's income (Form 8814) can be included on the parents' return if they only have non-W-2 income (the permanent fund, interest on savings accounts and dividends/capital gains on investment accounts) but if their income is more than $2,100, this may not be the best option. If they have W-2 wages, they do have to file their own return but you are still able to claim them as a dependent. For help with reporting their income, call or e-mail my office.
Alaska's minimum wage went up to $9.84 an hour effective January 1, 2018. It will be adjusted every year for inflation with the new rate being effective on January 1 of each year.
STANDARD MILEAGE RATES FOR 2018 went into effect on January 1, 2018:
54.5 cents per mile for business miles driven
18 cents per mile for medical or moving miles driven
14 cents per mile driven for charitable purposes