Tax laws have significantly changed with the passage of The Tax Cuts and Jobs Act of 2017. Our focus in this article is on the impact of this new law on individuals. Future newsletters will address the impact on Corporations, Pass-Through Entities, Trusts & Estates and Exempt Organizations.

Changes for Individuals – A Summary

• Capital Gains rates remain at 20%
• The Obamacare surtax of 3.8% on net investment income remains
• The Medicare .9% surtax on wages and other ordinary income remains
• The “Kiddie Tax” is new. It taxes minors like they are a trust. Rates start at 37% on unearned income over $12,500 annually
• No more retroactive re-characterization of contributions to IRAs, as traditional or as Roth, or visa-versa
• Personal exemptions were merged into the doubled Standard Deduction
• The “Teacher Deduction” was doubled from $250 per year to $500 per year maximum deduction for classroom supplies
• The Mortgage Interest deduction remains available on loans up to $1,000,000, but for homes acquired after 1/1/18, the mortgage amount is reduced to $750,000 and the deduction of HELOC interest has been eliminated
• No more miscellaneous deductions or deductions for tax preparation fees
• No more moving expense deduction except for Armed Forces members forced to move under military order

If you have any questions or would like to schedule a free consultation, please contact us at:

Port Orchard Office: (360) 876-6425

Seattle Office: (360) 509-4329

We hope these tax tips are helpful. Wishing all of our clients and friends a Prosperous New Year! From the Law Offices of Seward and Associates, Attorneys at Law