Tax Cuts And Jobs Act (TCJA)

 

After many decades, the new Federal Tax Cuts And Jobs Act (TCJA) that is effective for tax year 2018 has changed significantly in terms of new formats and new tax laws. TCJA impacts deeply to both personal and business taxes.

 

Personal Income Taxes 

 

Below are some deductions that will disappear under the Tax Cuts & Jobs Act:

  • Personal Exemptions

  • Unlimited State & Local Tax Deductions

  • A $1 Million Mortgage Interest Deduction

  • Unreimbursed Employee Expenses

  • Miscellaneous Itemized Deductions

  • Moving Expense Deductions

  • Alimony Deductions

  • Specified Personal Casualty Loss Deduction

Business Income Taxes

  • C-Corporations will have a new flat tax rate of 21%

  • Pass-Through businesses such as Sole Proprietor, LLC, Partnership, S-Corporation and Trust and Estates will see some net profit tax savings under Section 199A if they meet requirements of Qualified Business Income (QBI) deduction.

  • In general 20% of taxpayer's QBI up to $315,000 taxable income for Married Joint Filings or $157,500 taxable income for all other taxpayers can be deducted as nontaxable. However, the Internal Revenue Service has restricted the 20% QBI deductions with some other limitations. (*)  

(*) With so many changes in the new federal tax laws, you should plan and discuss your tax situations with your trusted tax advisor. 

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