1. Tax Reform Highlights for Individuals
Richard Furlong, Jr.
Senior Stakeholder Liaison
October 26, 2018
Main Line Association for Continuing Education

2. “Tax Cuts and Jobs Act” PL 115-97
“An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”
Commonly Known as:
“Tax Cuts and Jobs Act”

3. Overview Revising forms, instructions and publications
Updating systems and programming
Issuing legal guidance
Collaborating with tax partners
Providing education and outreach to taxpayers
Providing training to IRS employees

4. Recommend a Paycheck Checkup
Some law changes in the Tax Cuts and Jobs Act may affect employee’s withholding.
Taxpayers can protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. 
Taxpayers can avoid too much withholding and receive more in their paychecks.
Taxpayers who make estimated tax payments should also re-estimate their estimated taxes.

5. Changes to standard deduction and personal exemptions
Standard Deduction Amount Increased
Single or Married Filing Separately—$12,000
Married Filing Jointly or Qualifying Widow(er)—$24,000
Head of Household—$18,000
Deduction for Personal and Dependent Exemptions Suspended

6. Changes to itemized deductions
Limit on overall itemized deductions suspended
Deduction for medical and dental expenses modified
Deduction for state and local income, sales and property taxes modified
Limit for charitable contributions modified

7. Changes to itemized deductions
Deduction for home mortgage and home equity interest modified
New dollar limit on total qualified residence loan balance

8. Changes to itemized deductions
Deduction for casualty and theft losses modified
Miscellaneous itemized deductions suspended – includes items formerly subject to the 2% of AGI limitation such as tax return preparations fees, uniforms, union dues, and unreimbursed employee business expenses such as, vehicle expenses, meals, entertainment and travel

9. Changes to Child Tax Credit
Child Tax Credit – increased to $2000 (including up to $1400 in additional child tax credit) per qualifying child
New Credit for Other Dependents - up to $500 for dependents who do not qualify for the child tax credit
Children must have a SSN to qualify for CTC or ACTC
Due Diligence Requirement

10. Other Tax Reform Changes for Individuals
Deduction for moving expenses suspended
Alternative minimum tax (AMT) exemption amount increased
Repeal of deduction for alimony payments

11. Other Tax Reform Changes for Individuals
Treatment of student loans discharged on account of death or disability modified
Repeal of deduction for amounts paid in exchange for college athletic event seating rights
Combat zone tax benefits available to Armed Forces members who served in the Sinai Peninsula

12. Health Care Coverage Reporting Reminder
For tax year 2018, the IRS will not consider a return complete and accurate if the taxpayer does not report full-year coverage, claim a coverage exemption, or report a shared responsibility payment on the tax return.
HealthCare.gov has health insurance options that are available for taxpayers.

13. Retirement Plans Recharacterization of a Roth Conversion
Plan Loans to an Employee that Leaves Employment
Disaster Relief – Retirement Plans

14. ABLE Accounts and 529 Plans
Rollovers from a 529 Plan
Saver’s Credit now Available for Contributions
Changes for People with Disabilities
529 Plans:
K – 12 Education

15. Tax Reform on IRS.gov IRS.gov/taxreform IRS.gov/getready
News Releases & Fact Sheets
Tax Reform Tax Tips
Frequently Asked Questions
YouTube Videos
Subscription Services
Legal Guidance

16. IRS.gov/tax-reform

18. Contact Information
Richard Furlong, Jr.
Senior Stakeholder Liaison

19. Richard Furlong, Jr. Senior Stakeholder Liaison
Highlights of
2018 Income Tax Changes
from a Tax Forms Perspective
Richard Furlong, Jr. Senior Stakeholder Liaison
October 26, 2018
Main Line Association for Continuing Education

20. 2018 draft tax forms are available at IRS.gov/DraftForms
You can go to IRS.gov/DraftForms to download or print available draft tax year 2018 forms, instructions, and publications.

21. Objectives Awareness of major income tax changes for tax year 2018
Awareness of tax form changes from 2017 to 2018
Awareness of new tax forms for 2018

22. Form 1040 Deduction for personal exemptions suspended
Standard deduction increased ($24,000/$18,000/$12,000)
Child tax credit increased; new credit for other dependents
New qualified business income deduction
Domestic production activities deduction repealed
New Section 965 inclusion of deferred foreign income

23. Schedule A Itemized Deductions
Home mortgage interest deduction modified
Deduction of private mortgage insurance expired
Deduction for state and local taxes limited
Overall limit on itemized deductions suspended
Miscellaneous itemized deductions suspended

24. Schedule 8812 Additional Child Tax Credit
Child tax credit (CTC) increased to $2,000 per child; additional child tax credit (ACTC) limited to $1,400 per child
Children identified by an ITIN no longer qualify for CTC or ACTC
Impact of credit for other dependents (ODC) on ACTC calculation--ODC subject to limits first, effectively like a credit that comes before CTC in the ordering rules

25. Form 2106 Employee Business Expenses
Limited to (can only be filed by):
Armed forces reservists,
Employees with impairment-related work expenses,
Employees who received employer reimbursements,
Qualified performing artists, and
Fee-basis state or local government officials.
Form 2106-EZ retired

26. Form 4684 Casualty and Theft Losses
Personal casualty or theft loss only to extent of loss from Federally declared disaster
Will have new field for entry of a FEMA code
No losses from employee property

27. Form 6251 Alternative Minimum Tax
Increased exemption amounts and phaseout thresholds
No adjustment for medical expenses
No adjustment for mortgage interest
No adjustment for miscellaneous deductions
No adjustment for the overall limit on itemized deductions
Line for electing large partnership adjustment removed

28. Form 8829 Business Use of Home
New line for “excess” real estate taxes

29. Form 8867 Due Diligence
New due diligence requirement for preparing returns of taxpayer filing as head of household
Due diligence requirement for the credit for other (non-child) dependents
Penalty amount now $520

30. Form 8903 Domestic Production Activities Deduction
DPAD repealed for tax years beginning after 2017
Taxpayers may still have DPAD for 2018 from fiscal year flow-through entities
Reporting may have been moved to a write-in or other deductions line instead of having its own line

31. Form 8949 Sales and Other Asset Dispositions
New code “Z” for deferred gain invested in a qualified opportunity fund

32. New Forms Form 461, Limitation on Business Losses
Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System, and related forms and schedules
Form 8979, Partnership Representative Revocation, Designation, and Resignation Form, and related forms and schedules
Form 8990, Limitation on Business Interest Expense

33. Retired Forms Form 2106-EZ, Unreimbursed Employee Business Expenses
Form 1065-B, U.S. Return of Income for Electing Large Partnerships, and related forms and schedules
Form 4626, Alternative Minimum Tax-- Corporations

34. Resources IRS.gov/Forms IRS.gov/TaxReform IRS.gov/FormChanges
IRS.gov/FormsUpdate
IRS.gov/Form1040, etc.
IRS.gov/DownloadForms
IRS.gov/PriorYearForms
IRS.gov/DraftForms