Oct 9, 2018
If ever a year required close attention to tax planning,
tax year 2018 is it. The Tax Cuts and Jobs Act of 2017 delivered
the most extensive tax changes in the last 30 years. As a result,
filing your 2018 taxes may be even more complex and
time-consuming.
Angela compiled a summary of some of the more important elements of
the new law and how they impact individuals and
businesses.
FOR INDIVIDUALS
In tax year 2018, most taxpayers will benefit from lower tax rates
and expanded income brackets. Congress passed some new deductions
but took away others. They also didn't make the changes to
individual taxes permanent - most will expire after 2025.
FOR BUSINESSES
Congress did decide to make the latest business tax changes
permanent, and they are historic in scope. Corporate income taxes
are down dramatically. Owners of S corporations and other business
entities will see a potentially large tax reduction on their
pass-through income
Estate Taxes
The estate tax, aka the "Death Tax" is a tax levied on
significantly large estates that are passed down to heirs.
Old- Estates up to $5.49 million in value were exempt from the
tax.
The top tax rate was 40 percent
New- Doubles the exemption for the estate tax. Now, estates up to
$11.2 million are exempt from the tax.
Miscellaneous Tax Deductions
Taxpayers can take the miscellaneous tax deduction if the items
total more than 2 percent of their adjusted gross income. The
amount that's deductible is the amount that exceeds the 2 percent
threshold. These are some of the major changes coming to the
miscellaneous tax deduction.
Tax preparation: Taxpayers can today claim an itemized deduction of
the amount of money they pay for tax-related expenses, like the
person who prepares their taxes or any software purchased or fees
paid to fee to file forms electronically.
Tax preparation: Taxpayers may not claim tax-preparation expenses
as an itemized deduction through 2025
Work-related expenses: Under current law, workers can deduct
unreimbursed business expense as an itemized deduction, like the
cost of a home office, job-search costs, professional license fees
and more.
Work-related expenses: The bill suspends work-related expenses as
an itemized deduction through 2025.
Investment fees: Taxpayers can currently deduct fees paid to
advisors and brokers to manage their money.
Investment fees: Under the new rules, the investment fee deduction
is suspended until 2025.
State and Local Tax (SALT) Deduction
Old- Taxpayers may include state and local property, income and
sales taxes as itemized deductions
New- Taxpayers are limited to claiming an itemized deduction of
$10,000 in combined state and local income, sales and property
taxes, starting in 2018 and running through 2025. Taxpayers cannot
get around these limits by prepaying 2018 state and local income
taxes while it is still 2017.
Moving Expenses
Old- Current law allows taxpayers to deduct moving expenses as long
as the move is of a certain distance from the taxpayer's previous
home and the job in the new location is full-time.
New- The new tax bill suspends the moving expense deduction through
2025. Until then, taxpayers are not permitted to deduct moving
expenses.
Moving-related deductions and exclusions remain in place for
members of the military.
Personal Casualty or Theft
Old- Under current tax law individuals can deduct uninsured losses
above $100 when property is lost to a fire, shipwreck, flood,
storm, earthquake or other natural disaster. The deduction is
allowed as long as the total loss amounts to greater than 10
percent of the taxpayer's adjusted gross income.
New- The new tax bill only allows taxpayers to claim the deduction
if the loss occurred during a federally declared disaster, through
2025.
Lot's so if you really want to know go over to Angela's site.