Good news: tax rates are reduced significantly.

Not-so-good news: many deductions you may have counted on are removed or capped.

  • DEDUCTIONS. Standard deduction for married couples is up: $24,000. But state and local itemized deductions are capped at $10,000. Deductions that have been eliminated include personal exemptions, unreimbursed employee expenses, tax prep fees and investment expenses.
  • INTEREST DEDUCTIONS. On new home mortgages, this is capped at a $750,000 debt level. On home equity loans, it is only deductible if used to buy, build or substantially improve the home securing the loan.
  • RETIREMENT. The maximum contribution allowed to a 401K plan is $19,000; or $25,000 for those age 50+.
  • PAYING SOCIAL SECURITY. In 2019, wages up to $132,900 are subject to Social Security tax.
  • ALTERNATIVE MINIMUM TAX. Changes were made to minimize the negative impact on single taxpayers with incomes less than $500,000 and married taxpayers filing jointly with incomes less than $1 million.