2018 Child Tax Credit and 2018 Medical Deductions

2018 Child Tax Credit

 Now you may have heard that the 2018 Child Tax Credit looks different today as a result of 2018 tax reform, and you’d be correct. In our current tax code, if parents make less than $110,000 jointly and $75,000 individually, they receive a $1,000 Child Tax Credit for qualified children under the age of 17. The 2018 tax reform bill increase that to $2,000 per child younger than 17. As well as raise the phase-out threshold to $400,00, and capo the refundable portion at $1,400.
The increase in the 2018 child tax credit comes at a cost. Starting in 2018, the tax overhaul repeals personal exemptions, which are valued at $4,050 per taxpayer. See where you will be in the 2018 Tax Bracket.

 

Medical Deductions 2018.

It is now easier to qualify for the medical expense deduction. Prior to the 2018 tax overhaul, medical expenses that exceeded 10 percent of the taxpayers adjust gross income were deductible. The revised plan lowers the threshold to 7.5 percent of adjusted gross income.

As long as you itemize your deductions instead of taking the standard deduction, out-of-pocket medical expenses that exceed 7.5 percent of your adjusted gross income could be deductible. Read more on other 2018 Tax Deductions

 

What About Health Care (Obamacare)?

 The affordable Care Act, otherwise known as Obamacare, has been repealed. The new tax reform bill removes the individual mandate penalty. Meaning individuals will no longer have to pay a tax penalty for not have health insurance.

Read more on the 2018 Tax Reform, or find out how to prepare for the 2018 tax with Strategic Tax Planning.