There are no fewer than 130 new tax provisions in the Tax Cuts and Jobs Act, according to Shaun Hunley, a technical editor of PPC products for Thomson Reuters Checkpoint in the Tax & Accounting business of Thomson Reuters, but with tax practitioners starting to focus on helping clients address the act’s impact, he has singled out five major planning opportunities for individuals.
Here are the top five TCJA tax planning opportunities for individuals in 2018:
No. 5 — Itemized deductions versus the standard deduction
The Tax Cuts and Jobs Act roughly doubles the standard deduction. This means that for 2018, joint filers can enjoy a standard deduction of $24,000. However, the new law suspends personal exemption deductions and eliminates or limits many of the itemized deductions. For example, the state and local tax deduction is now capped at $10,000 per year, or $5,000 for a married taxpayer filing separately. Also, the Tax Cuts and Jobs Act temporarily eliminates miscellaneous itemized deductions subject to the 2 percent floor (like tax preparation fees and employee business expenses) and limits the home mortgage interest deduction to home acquisition debt of up to $750,000, or $375,000 for a married taxpayer filing separately.