Is this email not displaying correctly?
View it in your browser .
Home Testimonials Events Blog/Vlog Contact Us

The Major Tax Changes: An Overview

 

The new tax law has dominated political discussion for months and will likely continue to do so well into 2018. Consequences, both intended and otherwise, are still unclear. But for now, these are the big changes for both individuals and companies. In general, the changes to individual provisions expire at the end of 2025, but the corporate changes are permanent.

We are available to help you with any questions.

Taxes for Individuals

The big news here is bracket changes. They've changed and are generally lower:

  • 10% (income up to $9,525 for individuals; up to $19,050 for married couples filing jointly)
  • 12% (over $9,525 to $38,700; over $19,050 to $77,400 for couples)
  • 22% (over $38,700 to $82,500; over $77,400 to $165,000 for couples)
  • 24% (over $82,500 to $157,500; over $165,000 to $315,000 for couples)
  • 32% (over $157,500 to $200,000; over $315,000 to $400,000 for couples)
  • 35% (over $200,000 to $500,000; over $400,000 to $600,000 for couples)
  • 37% (over $500,000; over $600,000 for couples)

The standard deduction nearly doubles, to $12,000 for singles and $24,000 for couples. This means fewer people will find it advantageous to itemize.

Those who continue to itemize, however, will see significant changes — especially if they're homeowners:

  • All state and local tax deductions are limited to $10,000.
  • The mortgage interest deduction is limited to payments on $750,000 of debt.

The alternative minimum tax is still in existence, but the exemption is increased, meaning fewer will be paying it.

The child tax credit is doubled to $2,000, with a refundable portion up to $1,400.

The estate tax is still with us, but the exemptions have been doubled. The number of families that will be subject to the federal estate tax is now vanishingly small.

Taxes for Businesses

The big story here is the lowering of the tax rate from 35% to 21%. However, there are other important provisions:

  • The corporate AMT is eliminated.
  • The limit on Section 179 expensing is increased to $1 million.
  • The new law limits the deduction for net operating losses to 80% of taxable income.
  • Instead of being an immediate deduction, research and development expenditures will need to be written off gradually.
  • “Passthrough” companies get a 20% reduction, but there is an income phaseout.

Businesses and individuals will need to carefully consider what their situation is in 2018 and plan accordingly.

If you want more details, visit the links below:

Litherland, Kennedy & Associates, APC, Attorneys at Law
Litherland, Kennedy & Associates
Attorneys at Law
info@attorneyoffice.com * www.attorneyoffice.com
(408) 356-9200
3425 S. Bascom Avenue. Suite 240
Campbell, CA 95008
Friend Me on Facebook
Follow Me on Twitter
Connect with me on LinkedIn
Saved Articles
Comments and Feedback
Refer A Friend
Your Privacy
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
Powered by
Copyright © IndustryNewsletters All rights reserved.

This email was sent to:

Mailing address: 3425 S. Bascom Ave. Suite 240, Campbell, CA 95008