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YOUR MONEY 39 Association of the United States Navy increased from $6,350 to $12,000. A surviving spouse and married taxpayers filing jointly will receive a $24,000 deduction (increased from $12,700). e stan- dard deduction for heads of household is increased to $18,000 from $9,350. e act leaves intact the addi- tional standard deduction for filers who are age 65 and over or blind, which allows a married couple to claim an additional $2,600 and a single taxpayer an additional $1,600 when they file their 2018 taxes. It is anticipated to result in more taxpayers utilizing their standard deduction instead of itemized deductions. Personal Exemption: e $4,050-per-person exemp- tion is eliminated. Child Tax Credit: e credit is increased from $1,000 to $2,000 per child, with modified adjusted gross income phase-outs at $400,000 for married taxpayers filing jointly; and $200,000 for single, head-of-house- hold and married-filing-separately taxpayers. However, only up to $1,400 is refundable for certain filers. A new $500 nonrefundable credit also is available for dependents who do not qualify for the child tax credit. Taxpayers can claim this credit for children who are too old for the child tax credit, as well as for non-child dependents. Medical Expense Deduction: e deductible limit is decreased from 10 percent to 7.5 percent of adjusted gross income for 2017 and 2018. State and Local Tax Deduction: State income, prop- erty and sales taxes will be deductible for individual taxpayers only up to an aggregate cap of $10,000. is cap will sunset on Dec. 31, 2025. e act prevents a deduction for the prepayment of any state income taxes related to a year beginning aer 2017. Mortgage Interest and Home Equity Loans: e mortgage interest deduction for home loans entered into aer Dec. 31, 2017, is decreased from $1 million to $750,000. Mortgage loans entered into prior to Jan. 1, 2018, will not be impacted. While taxpayers will continue to be able to deduct interest on second homes, the interest expense deduction is eliminated for home equity loans beginning aer Dec. 31, 2017. Charitable Contribution Deduction: e current deduction limitation of 50 percent of the individual's adjusted gross income for contributions to public char- ities is increased to 60 percent. Existing limits continue to apply to contributions of marketable securities or other property to public charities and to all contribu- tions to private foundations. Alimony Deduction: Under the act, with regard to divorce or separation agreements executed on or aer Jan. 1, 2019, alimony payments will no longer be deductible by the payor or income to the recipient. Moving Expense Deduction: e act eliminates the moving expense deduction, except for the expenses of active members of the military who relocate pursuant to military orders. Under prior tax law, a taxpayer could utilize the deduction when moving due to new employment that is located at least 50 miles further than the taxpayer's previous place of employment from the taxpayer's residence. Other Deductions: e following deductions remain status quo under the act: Educator Expense Deduction, which allows K-12 educators to deduct up to $250 per year for unreimbursed classroom supplies; student loan interest paid can be deducted up to $2,500 by quali- fying taxpayers; health savings account (HSA) deduc- tion; IRA deduction; and deductions for self-employed taxpayers (SE tax, SE health insurance, SE qualified retirement plan contributions). Penalties e act eliminates the Affordable Care Act's mandate that people have health insurance or pay a penalty. LCDR Marc J. Soss has served as a U.S. Navy Supply Corps Reserve officer since 1998. He is a nationally published author, AUSN life member and a frequent contributor to Navy magazine. His website is www.

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