The Tax Cut and Jobs Act

What does it mean for me?

  

On December 22, 2017, President Trump signed into law Public law no. 115-97 or “The Tax Cut and Jobs Act.” This is the most comprehensive reform of the U.S. tax code since 1986 and will have significant effect on many taxpayers. Some of the more common changes include:

  • Modification of tax rates, and the income tax brackets for those rates
  • Repeal of personal exemptions
  • Increased standard deductions
  • Changes to itemized deductions including:    
    • Medical expenses
    • Mortgage interest
    • State and local taxes - including real estate and income taxes
    • Charitable contributions
    • Miscellaneous deductions - including non-reimbursed employee business expenses
  • Changes to alimony paid or received
  • Changes to tax credits, such as those for children
  • Significant differences in the treatment and taxability of income from different types of entities (LLC's, partnerships, corporations, etc..) reported on a  personal return
  • Alternative minimum tax

  

Many of the personal income tax changes are temporary, starting in 2018 and expiring in 2025, unless renewed by Congressional action. Most of the changes to business taxes are, in general, permanent.
 

Individual income tax clients should be in touch with us as soon as possible, to modify withholding and estimated taxes so as to avoid large tax bills, interest and/or penalties moving forward.
 

Those who operate a business have an even more urgent need to work on tax planning, as the new tax code makes the structure of certain business entities extremely relevant to their tax liability.
 

Please contact us as soon as possible. During peak tax preparation season, it may be difficult for us to provide adequate time to each client for appropriate tax planning.