The latest US tax reform, effective January 1, 2018 changed the tax game forever. Well really until 2025.

Taxpayers will be chocked and amazed at their latest return (especially if you didn’t make the adjustments to their W4s).

These are some of the pesky things that changed:

Table of Contents

TAX RATES DECREASED!!!!

1. General Rule of Thumb: Everything eventually changes. Try not to get too comfortable with the status quo. Tax reform changes triggered changes in your W4s. Read: Smaller Refund? It’s not the government’s fault, it’s yours.

2. The personal exemption eliminated for the years 2018-2025. Taxpayers can no longer claim personal exemptions for themselves, their spouses, or each of their dependents. (For a family of four that was a total of $16,200 or $4,050 each)

3. The Child Tax Credit increased from $1,000 to $2,000. That’s an additional $1k for each qualifying child; only up to $1,400 of which is refundable. Racking in the money.

4. The threshold for deducting medical expenses lowered from 10% to 7.5% of your adjusted gross income (AGI) ⇠ super important term.

5. The alternative minimum tax (AMT) exemption amount and phaseouts increased, potentially resulting in you not being subject to the AMT. Yeah, something for the Middle Class.

6. The Affordable Care Act’s (ACA) individual mandate repealed. Yep, it went political but it was unavoidable, at least we don’t have the penalty fees anymore.

7. The State and Local Tax (SALT) deduction capped at $10,000. This SALT deduction includes sales and local income taxes as well as property taxes. People with bigger homes valued at over $300k+ are all mad about this one.

8. The Home Mortgage Interest deduction reduced. Individuals who purchased a home after December 15, 2017, can only deduct interest up to $750,000 in mortgage debt (previously $1 million). If your mortgage was in place prior to December 14, 2017, the $1 million in qualified debt is still in place.