ElectroFile Income Tax Service   Income Tax Service
5200 W Market St
Greensboro, NC 27409
  Terry Hough, President Terry Hough

November 27, 2018

Things to Know for the Current Tax Year

Expired Provisions
Unless Congress passes legislation to extend them, the following individual provisions will not apply on 2018 returns:

Tax Cuts and Jobs Act Changes and Related Form Changes

The Tax Cuts and Jobs that was signed into law in December 2017 contained many changes that went into effect in 2018.

The following is an explanation of the changes to the 2018 federal forms and details on the Tax Cuts and Jobs Act provisions that will affect most taxpayers in 2018. For a more complete listing of the new provisions see the Tax Cuts and Jobs Act page.

Changes Affecting and Redesign of 2018 Form 1040
The following lines were added to Form 1040 due to the new tax law:

The following lines were removed due to the new tax law:

The Standard Deduction was increased as follows:

The Additional Standard Deduction for the Aged and Blind is still applicable.

Personal and dependent Exemptions were eliminated.

Child Tax Credit was changed as follows:

Although not directly related to the new tax law the IRS took the opportunity to redesign the Form 1040 and eliminated the Forms 1040A and 1040EZ.

Form 1040 was redesigned as follows :

For more details see the following drafts on the IRS website:

Schedule A (Itemized Deductions)
The following changes to Schedule A have been made:

For more details see the draft of the 2018 Schedule A on the IRS website.

Here is a summary of changes to itemized deductions for 2018:

Form 2106 (Employee Business Expense)
This form is no longer applicable for employee job expenses that were deductible as an itemized deduction. It will now only be used for the adjustment to income for certain business expenses of reservists, performing artists and fee-basis government officials.

The Form 2019EZ has been eliminated.

Other Tax Cuts and Jobs Act Provisions

Individual Provisions
The following changes relate to federal individual returns

ACA Penalty for Individuals not having Health Insurance
The shared responsibility payment (penalty) is still in effect for 2018.

Tax Rates
Federal tax rates were changes as to - 10%, 12%, 22%, 24%, 32%, 35% and 37%.
The income brackets are when taxable income is over the amount listed in each column.


Unmarried Individuals

Married Filing Joint

Head of Household





























Moving Expenses
Only members of the military may take a deduction (an adjustment to income) for moving expenses beginning in 2018.

Alternative Minimum Tax
The exemption amounts increased to $109,400 for joint returns and $70,300 for all other taxpayers for 2018.

Business related provisions
The following changes were made with the passage of the Tax Cuts and Jobs Act for sole proprietors, corporations and partnerships for 2018.

20% Deduction for Qualified Business Income (Section 199A)
For 2018 an individual may be able to deduct 20% of their domestic qualified business income from a partnership, S Corporation and/or sole proprietorship.

For more information on this deduction see the following:

Entertainment Expenses
A deduction for entertainment expenses is no longer allowed.

100% Bonus Depreciation
100% bonus depreciation may be taken for qualifying new or used property purchased September 28, 2017 - December 31, 2022.

The definition of eligible property was expanded to include used property if all the following factors apply if:

Depreciation Limits for Autos and Personal Use Property
The yearly limitations for passenger autos placed in service during 2018 are:

Section 179 Expense
For 2018 the maximum amount that can be taken as a Section 179 expense is $1,000,000 which begins to phase out when total asset purchases reaches $2,500,000 for the year.

The following property now is eligible for Section 179 expensing:

Depreciation of Improvements on business property
A new qualified improvement property category was created which replaces the old qualified leasehold improvement, qualified restaurant and qualified retail improvement property categories. This new category went into effect on January 1, 2018.

The new qualified improvement property has a general year CRS recovery period. However unless Congress makes a technical correction, qualified improvement property must be depreciated over 39 years and does not qualify for 100% bonus depreciation.

Farm Property Depreciation
Beginning in 2018 the recovery period for machinery and equipment used on a farm is 5 years (it was 7 years). This does not apply to grain bins, cotton ginning assets, fence or other land improvements.

The Tax Cuts and Jobs Act repealed the requirement to use the 150 percent declining balance method for property used in a farming business (i.e. for 3, 5, 7 or 10 year property).

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All information provided is general in nature and intended to create awareness, not to address the specific circumstances or concerns of any individual or entity. Although we try to provide correct and timely information, we cannot guarantee the accuracy of any information or that such information will continue to be accurate in the future due to the changing nature of the tax laws. Before acting on any of the information provided here, you should consult with a professional advisor who knows all of the unique facts and circumstances pertinent to your particular situation.