Congress has passed the much anticipated overhaul of the federal income tax code. Here we highlight the changes most relevant to individual investors. We will assess additional implications in coming months.
• Seven income tax brackets remain but rates are reduced. The new rates, with associated thresholds, are as follows:
The standard deduction is almost doubled, to $12,000 for single filers and to $24,000 for married couples filing jointly.
• The personal exemption has been eliminated.
• The combined deduction for state and local property, income and sales taxes is capped at $10,000. This write-off was previously unlimited.
• The child tax credit is doubled, to $2,000, for children under 17 and the income threshold for claiming the full credit is increased to $400,000 for married couples (up from $110,000 today) and $200,000 for single parents (up from $75,000).
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