The New Tax Law And You
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You’ve heard: Major tax legislation was approved by Congress and signed by the President, with changes effective January 1, 2018. Here are some of the highlights that will affect individuals:
The standard deduction is nearly doubled for each “filing status.”
The child tax credit is increased.
Personal exemptions are eliminated.
Deductions for state and local property and income taxes are capped at $10,000 per year total.
Unreimbursed business expenses, which includes items such as union dues, will no longer be deductible. Neither will moving expenses.
Alimony will not be deductible by the payer or taxable to the recipient beginning with divorces finalized after December 31, 2018.Sole proprietors, LLC’s and S – Corporations – “pass-through entities” — will be entitled to a substantial deduction. There are restrictions, and the details are complex.
Non-owner occupied rental property is also entitled to the 20% deduction.
There is no change to the general deductibility of pass-through entities’ business expenses, student loan interest or to educational credits.
If you itemize, you may still deduct charitable contributions.
If you itemize, you may still deduct medical expenses if they exceed specific thresholds.
There is also no change to retirement plan deductions, capital gains/investment income treatment or pre-tax employer sponsored “cafeteria plans.”
Yes, it’s complicated and everyone’s tax situation is different. The IRS needs to issue specific guidance on some matters, so it could take some time before your (inundated) tax practitioner is able to provide more than general estimates of your 2018 situation.
WHAT’S NEW AT ALSD?
In our never ending quest to serve you better we have
We have an immediate need for a tax input coordinator/bookkeeper. We have a unique culture,
NOTE: Every situation is different and federal and state tax laws are subject to change. This article is presented exclusively for informational purposes and is not intended to substitute for obtaining tax or financial advice from a tax or other business professional. Names and other details may have been changed for illustration purposes. Reference to commercial products does not constitute an endorsement.The views expressed in this article are solely the author’s and do not necessarily reflect the views of ALSD or its individual owners.
