IN THE LAST TWO ISSUES, we discussed the tax law changes that impact corporations and addressed international tax law changes. This month’s column focuses on the tax law changes associated with individuals. One of the bigger changes in the new tax law involves tax brackets. The highest tax bracket in 2018 is 37 percent, down from the 2017 high rate of 39.6 percent. Additionally, the brackets have become a bit larger, meaning each rate bracket taxes more dollars than in the past, so it takes longer (more taxable dollars) to reach the highest tax bracket.

One of the tax return items no longer around in 2018 is the personal exemption. State and local taxes — which consist of income taxes paid to states and cities and real estate and school income taxes — are still deductible; however, they are capped at $10,000 annually. For many individuals this is a significant cap, as many tax filers’ state and local taxes exceed that amount. Other changes remove the following itemized deductions and miscellaneous deductions: tax preparation fees, investment advisory fees, employee business expenses, moving expenses and business entertainment expenses. However, business meals are still 50 percent deductible, so your dining habits do not have to change.

Also, since approximately 50 percent of marriages end in divorce, it is important to know alimony income and alimony deductions have also been removed in 2018.

The new 2018 tax law brought some significant changes concerning mortgages and interest expense. If you had a mortgage in existence on Dec. 15, 2017, there are no changes for you. For mortgages obtained after that date, home interest deductions are limited to principal mortgage amounts of $750,000. Refinancing of homes after Dec. 15, 2017, is limited to $1 million and only up to the debt level at the date of refinance. Interest is only deductible on home equity lines of credit to the extent the proceeds are used to acquire, construct or substantially renovate the property.

Some other changes are positive in nature. Medical expenses remain deductible and they now need to exceed only 7.5 percent of your adjusted gross income, down from 10 percent. The standard deduction almost doubled for 2018 to $24,000 for married couples, which takes away some of the sting from losing the personal exemptions (mentioned above). Also, for those individuals who earn their money from their businesses as opposed to being an employee, business losses are limited to $500,000 per year, and any excess can be carried forward as a net operating loss. Losses are limited to 80 percent of taxable income.

In summary, some taxpayers will see some real benefit from the tax law changes, and others will not see their overall tax change materially because there are both positive and negative changes in the new tax law. Bottom line: Speak to your tax advisors and plan ahead as much as possible. The laws are not fully written yet, so there will be more clarity in the coming months, which should allow your tax planning to become a bit easier.