Tom Meaglia, ChFC®

Chartered Financial Consultant


Investment Advisor Representative

CA Insurance Lic. #0567507

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

Toll Free: 800-386-3700

Bus: 909-593-6105

Cell: 818-681-8600

Fax: 909-593-6120



March/April 2019

2018 Tax Changes: Coming and Going

Article Image

As the filing deadline nears for your 2018 federal tax return, it may be helpful to brush up on changes that can affect how much you pay. Some of the changes cited below are subject to income limits and other qualifications, so check with your tax professional to learn about these and other changes to your 2018 return. Also beware that many individual changes will expire in 2026.

More Tax Breaks
The standard deduction increased significantly to $12,000 for individuals, $24,000 for couples filing jointly and $18,000 for heads of households. Income brackets at which you pay ordinary and capital gains tax also increased significantly, as did the threshold at which taxpayers must pay the Alternative Minimum Tax (AMT). Your children under age 18 may net you a $2,000 child tax credit, if you qualify by income.

The estate tax exemption* more than doubled to $11.18 million for single taxpayers and $22.36 million for couples filing jointly. You can deduct charitable contributions of up to 60% of your adjusted gross income, and inflation indexing boosts the annual gift tax exclusion to $15,000 per taxpayer per recipient. The limit on qualifying income for taking itemized deductions also disappears in 2018.

Fewer Tax Breaks
A combined limit of $10,000 for state and property tax deductions is new to 2018, which taxpayers in highly taxed states will notice. The mortgage cap on the amount of all home loan interest you can deduct is $750,000, down from $1 million. Interest on home equity loans and second mortgages is deductible only for money used for home improvements. Deductions for personal exemptions, moving expenses (service members exempt), unreimbursed job expenses, and casualty and theft losses outside a federal disaster area are also history.

Business: Give and Take
Corporate income taxes decreased, and owners of S corporations and other business entities may see taxes reduced through a special pass-through income tax provision. Section 179 expensing limits doubled to $1 million with a $2.5 million phase-out, and certain equipment and bonuses may be 100% depreciated in the year the expense is incurred.

However, employee transportation benefits are no longer deductible. Neither are entertainment expenses. Larger businesses will also see the end of full interest expensing, which is now limited to any business interest income plus 30% of the business’ adjusted taxable income.

Look Ahead
Alimony payments received according to agreements created or modified after 2018 will no longer be taxable.** You may deduct unreimbursed medical expenses exceeding 7.5% of adjusted gross income. If you don’t have a qualified health insurance plan, you may owe a tax penalty of $695 per adult or 2.5% of household income, whichever is higher, in 2018. The penalty expires in 2019.

Still Time
Income qualification and contribution limits, which are indexed to inflation, increased for a variety of qualified retirement plans and you still have time to set up and contribute to a traditional IRA before your tax filing deadline. You may also contribute to a Roth IRA until that date. While a Roth IRA doesn’t offer tax-deferred contributions, its growth and eventual distributions (when meeting certain terms) are tax-free.***

*** Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ó, may be subject to an additional 10% IRS tax penalty.


Enter your Name and Email address to get
the newsletter delivered to your inbox every month.


Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

Investment advisory services offered through Fusion Capital Management, an SEC Registered Investment Advisor. 9111 Cypress Waters Blvd., Ste 140, Dallas, TX 75019.
Meaglia Financial Consulting and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.