You may now use 529 accounts for tuition, fees, books and related expenses for elementary and secondary schools, including public, private and religious schools, up to $10,000 per year per student.
If you convert a pre-tax traditional IRA to a post-tax Roth IRA, you no longer have until October 15 of the year following the conversion to reverse that decision. An unfortunate tax situation could result if the value of the IRA drops after the conversion.
Your standard deduction almost doubles, from $6,350 to $12,000 for single individuals and from $12,700 to $24,000 for married couples, indexed for inflation. For this reason, fewer taxpayers will be itemizing deductions.
If your mortgage was signed after December 15, 2017, your interest deduction is limited to interest paid on the first $750,000 of the acquisition indebtedness. Interest paid on a home equity loan is no longer deductible regardless of when it was acquired.
If you itemize deductions, you may only deduct state and local sales, income and property taxes of up to $10,000.
For each child, you will receive a $2,000 child tax credit. This is phased out if you make more than $400,000 for married taxpayers filing jointly (and $200,000 for all other taxpayers).
You may now deduct annual gifts to public charities and certain other organizations of up to 60% of your adjusted gross income. Note that this only helps if you itemize deductions on your tax return. Remember you need to obtain a contemporaneous written acknowledgment for all charitable gifts.
You are no longer permitted to deduct the purchase of tickets to college athletic events on your return.
If you would like to know how the Tax Cuts and Jobs Act specifically impacts you and what planning opportunities it might offer, please contact your attorney at Warner Norcross + Judd. If you are not currently working with an attorney, please contact Jennifer Remondino, Chair of the Trusts and Estates Practice Group, at 616.396.3243 or jremondino@wnj.com. She will refer you to an attorney best suited to help you. The estate planning attorneys at Warner Norcross + Judd are well qualified to assist with the review and revision of your estate plan.
