TCJA kiddie tax changes, Reinstatement of some tax provisions
- Kiddie tax rules were changed upon TCJA where the kid’s unearned income was touching 37% even with $12,070 of income.
- With old rules, this income was taxed at the parent’s marginal rates which is back.
- TCJA rule changes have been repealed from tax years 2020 and it also gives an option to use parent’s tax rate for 2018, 2019 or both based on choice.
Reinstatement of Some Tax Provisions:
- Exclusion from income for cancellation of acquisition debt on principal residence (up to $2m)
- Deduction for mortgage interest as residence premiums
- 7.5% floor for medical expenses from 10%
- Above the line tuition and fees deduction.
- Non-business energy property credit for energy efficient improvements to residence
This is retroactive from Jan 1, 2018 and will expire by Dec 31, 2020.