Tax Rates
 
Top tax rate has fallen from 39.6% to 37% and the bottom rate of 10% will cover more income. In general, almost all tax rates have been reduced by 2 or 3 percent! For C corporations the tax rate has dropped to 21% from the top tax rate of 35% and the corporate AMT is official gone!
 
Standard Deduction
 
Standard deduction nearly doubles for all filers making it more difficult for taxpayers to itemize.
 
Exemptions
 
Personal exemptions have been eliminated! 
 
Child Tax Credit
 
The Child Tax Credit has increased to $2,000 from the past $1,000. An additional $500 credit is provided for each non-child dependent. The income level has also increased from $110,000 to $440,000 for married filers!
 
Deduction For Qualified Business Income
 
Pass-through entities, such as, an S corporation, partnerships, and sole proprietorship's whose profits pass-through to the owner on their personal tax return, may now be able to deduct up to 20% of their qualified business income if certain requirements are met. 
 
Mortgage Interest
 
Still deductible, but the interest deduction will be allowed for up to $750,000, (currently $1 million), in mortgage principal on new homes purchased after December 15, 2017. The home-equity loan interest deduction may be deductible if certain requirements are met.
 
State and Local Income Tax Deduction
 
Deduction is allowed up to $10,000 a year for state and local income taxes, including property taxes. 
 
Medical Expenses
 
Taxpayers can deduct medical expenses that are 7.5% or more of adjusted gross income if itemizing.
 
Charitable Contributions
 
For tax year 2021 taxpayers who do not itemize will now be able to take a $300 above-the-line deduction on cash donations. For those who itemize, the 60% limitation is now 100%!