Major changes to tax laws are coming in 2018 as Congress passed the Tax Cuts and Jobs Act on December 20th. Some of the highlights of the tax bill include:
A decrease in tax rates for individuals and corporations.
An increase in the standard deduction to $12,000 for singles and $24,000 for married filing jointly.
Personal exemptions are eliminated.
An increase of the child credit to $2,000 per qualifying child.
The mortgage interest deduction will be limited to interest on the first $750,000 (for MFJ) of the loan.
Taxpayers can deduct up to $10,000 in state and local taxes.
A repeal of the individual Obamacare health insurance mandate.
A deduction for qualified business income from certain pass-through entities.
These are just a few of the upcoming changes for businesses and individuals.
For more information about the Tax Cuts and Jobs Act please reference the following tax briefing or contact our office with any questions.
Year-end tax planning is always taxpayer specific, but there are some general planning strategies that will be applicable for many as we transition to the new tax laws in 2018. Two of those strategies include:
Accelerating deductions in 2017 before tax rates decrease and the standard deduction increases in 2018 (e.g. charitable contributions, medical expenses, mortgage interest, property taxes).
Deferring income to 2018 when the lower tax rate is in effect.
We will keep you updated over the next few months with more details, analysis and tax-planning strategies for these new complex and wide-reaching tax laws. We are here for you. Please contact us with questions or to discuss any year-end planning needs.