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Jan 11, 2018

Friends Talk Finance:

New Tax Plan and Podcast Year in Review

Disclaimer: Before we start talking about taxes, I want to remind everyone that we ARE NOT CPAs. Bonnie is a Dermatologist, I’m a Pediatric Gastroenterologist and in NO WAY do we claim to be experts in this stuff. We are simply trying to educate you guys on your commute to work or while you are walking your dog. We know you don’t have time to read all these articles, so we did it for you. Each of your own tax situations is unique TO YOU so if you have questions, get a CPA and ask them yourself.

We also DIDN'T talk about some important topics that you may have heard about such as the change in the tax brackets

We DID talk about the following regarding the Tax Cuts and Jobs Act of 2017:

  1. Alimony payments out no longer deductible 
    • Recipient of Alimony now doesn’t pay taxes on Alimony income
    • This one goes into effect in 2019, so you get a break for 2018 if this is your situation
  2. Property Tax Cap (along with SALT- State and Local Tax)
    • AMT and why pre-paying might not have helped you 
  3. Mortgage Interest Deduction:
    • Mortgage interest on home purchase loans is still deductible under new tax reform up to $750,000 (was $1 million)
      • Grandfathered in if you bought before Dec 15, 2017
    • Second homes mortgages can be tax deductible, but you can only claim $750,000 total of interest across all your properties 
    • Deduction for interest on home equity loans is nondeductible in 2018
      1. No grandfathering
      2. Many people have talked about using a home equity loan to pay off their student loans because at least that interest is “tax deductible”, well not anymore.
  4. Less marriage penalty tax
  5. Can no longer do above the line deductions for Moving expenses for new job
    • Exception for the Military
  6. Estate tax limit doubled
  7. Gift tax limit is now $15K (was $14K)
  8. AMT sucks less
  9. 529 money can be used for private elementary & high school (10k per kid per year). 
  10. Small increase in employee contribution limits to 401(k), 403(b), most 457 plans: Now $18,500 for 2018, total is $55K

Here are some awesome links for more information about the new Tax Code:

White Coat Investor: What Doctors Need to Know about the Tax Cuts and Jobs Act

Physician On Fire: Tax Reform! How Physicians and the Self-Employed are Affected

Kitces.com: Individual Tax Planning Under The Tax Cuts And Jobs Act Of 2017

The Motley Fool: Your Complete Guide to the 2018 Tax Changes

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