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For tax years beginning after December 31, 2017 and before January 1, 2026, seven brackets will apply to individuals: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

No change has been made to the filing statuses that apply to individuals.
In 2017 all taxpayers (other than those filing Married Filing Separately) became subject to the 35% bracket at the same level of taxable income ($416,700). For tax years beginning after December 31, 2017 and before January 1, 2026, the 2nd highest bracket will now apply based upon filing status.

1 Unmarried taxpayers will have the 35% bracket apply once taxable income exceeds $200,000.

2. Joint filers will have the 35% bracket apply once taxable income exceeds $400,000.

3. Separate filers will have the 35% bracket apply once taxable income exceeds $200,000.

4. For unmarried taxpayers (both Single and Head of Household filing statuses), the top bracket applies to taxable income in excess of $500,000.

5. Married taxpayers filing jointly will have the 37% rate apply once taxable income exceeds $600,000, with one-half that amount ($300,000) being the threshold for married taxpayers filing separate return.

The Act increases the base standard deduction from the inflation adjusted levels that applied in 2017 to:

$12,000 for Single, Qualifying widower and Married filing separately taxpayers.

$24,000 for married taxpayers filing Joint returns,

$18,000 for taxpayers filing as Head of Household.

The additional standard deduction available to taxpayers who are age 65 or older and or blind remain unchanged.
For 2018 the additional amount is $1,300 for married taxpayers and $1,600 for unmarried taxpayers.

The IRS standard business mileage rate for 2018 is 54.5 cents a mile
.
The rate for medical expense and moving expense for certain military personnel deductions is 18 cents a mile.

For charitable volunteers the mileage rate is unchanged at 14 cents a mile.

The combination of residential property taxes and Income or sales taxes is capped at $10,000.

Property taxes remain fully deductible for taxpayers in a business or for-profit activity, so taxes paid on rental realty can be taken in full on Schedule E.

One of the changes imposed by the Tax Cuts and Jobs Act is the creation of new Section 199A, “Qualified Business Income”.
This new code section, non-corporate taxpayers (including trusts and estates) that have Qualified Business Income (“QBI”) from a partnership, S Corporation or sole proprietorship can take a deduction of up to 20% of the QBI.

QBI is generally defined as the net amount of income, gain, deduction and loss relating to a qualified trade or business and effectively connected to the conduct of the trade or business within the United States.

If the net amount is less than zero, the amount is treated as a loss from a qualified trade or business in the succeeding tax year.

Certain types of income are specifically excluded from being treated as QBI, and thus not eligible for the deduction. Investment income along with reasonable compensation payments, guaranteed payment to a partner for services rendered and payments for services to partners not acting in their capacity as partners are not included.

The deduction is a deduction from AGI in arriving at Taxable Income. It is not an or above the line deduction.

A limitation is imposed on income from certain specified service businesses, including businesses that perform services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, investing and investment management, trading or dealing with securities and any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners.

Specifically exempt from the definition of service business are engineering and architectural services.

For pass-through income from a service business, a limitation phases in when the owner’s taxable income (from all sources) exceeds $157,500 for single taxpayers and $315,000 for married taxpayers filing joint returns and is completely phased-out when taxable income exceeds $207,500 and $415,000 respectively.

A second limitation applies based upon W-2 wages and capital of a trade or business. In general, the deduction cannot exceed the greater of 50% of the W-2 wages of the business; or the sum of 25% of the W-2 wages paid plus 2.5% of the unadjusted basis, immediately after acquisition, of all “qualified property”.

Qualified property is defined as all tangible, depreciable property held by and used by the business at the close of the year.

The limitation based on W-2 wages and capital does not apply to any passthru entity owner with taxable income that does not exceed the $157,500/$315,000 threshold. Once income exceeds this amount, the W2/Capital limitation phases in and applies fully once the taxpayer’s taxable income exceeds the $207,500/$415,000 threshold

One of the changes imposed by the Tax Cuts and Jobs Act is the creation of new Section 199A, “Qualified Business Income”.
This new code section, non-corporate taxpayers (including trusts and estates) that have Qualified Business Income (“QBI”) from a partnership, S Corporation or sole proprietorship can take a deduction of up to 20% of the QBI.

QBI is generally defined as the net amount of income, gain, deduction and loss relating to a qualified trade or business and effectively connected to the conduct of the trade or business within the United States.

If the net amount is less than zero, the amount is treated as a loss from a qualified trade or business in the succeeding tax year.

Certain types of income are specifically excluded from being treated as QBI, and thus not eligible for the deduction. Investment income along with reasonable compensation payments, guaranteed payment to a partner for services rendered and payments for services to partners not acting in their capacity as partners are not included.

The deduction is a deduction from AGI in arriving at Taxable Income. It is not an or above the line deduction.

A limitation is imposed on income from certain specified service businesses, including businesses that perform services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, investing and investment management, trading or dealing with securities and any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners.

Specifically exempt from the definition of service business are engineering and architectural services.

For pass-through income from a service business, a limitation phases in when the owner’s taxable income (from all sources) exceeds $157,500 for single taxpayers and $315,000 for married taxpayers filing joint returns and is completely phased-out when taxable income exceeds $207,500 and $415,000 respectively.

A second limitation applies based upon W-2 wages and capital of a trade or business. In general, the deduction cannot exceed the greater of 50% of the W-2 wages of the business; or the sum of 25% of the W-2 wages paid plus 2.5% of the unadjusted basis, immediately after acquisition, of all “qualified property”.

Qualified property is defined as all tangible, depreciable property held by and used by the business at the close of the year.

The limitation based on W-2 wages and capital does not apply to any passthru entity owner with taxable income that does not exceed the $157,500/$315,000 threshold. Once income exceeds this amount, the W2/Capital limitation phases in and applies fully once the taxpayer’s taxable income exceeds the $207,500/$415,000 threshold

For 2018, the maximum credit amount is $3,461 for one qualifying child, $5,716 for two qualifying children, $6,431 for three or more qualifying children, and $519 for taxpayers who have no qualifying child. The phaseout ranges for the credit have been adjusted for inflation

The $250 (as adjusted for inflation) deduction for eligible educators remains at that level.

For 2018, you are required to have minimum essential health coverage through an employer plan, a government program, or other plan, or pay a penalty. The mandate does not apply after 2018.

To help those of modest means pay premiums for coverage obtained from a government exchange (Marketplace), there’s a premium tax credit . Eligibility for this advanceable, refundable tax credit depends on your household income and other factors.

The credit continues to be available even though the individual mandate ends after 2018.

The rules relating to the exclusion of gain on the sale of a principal residence remained unchanged. $500,000 for married couples and $250,000 for the other filing status.