A Review of the Tax Cuts and Jobs Act

 

Reduces the corporate tax rate from 35% to 21%;

Repeals corporate Alternative Minimum Tax (AMT);

Permits deductions for qualified business income for pass-through entities (sole proprietorships, partnerships, LLCs, and S Corporations) of up to 20%;

Almost doubles the Standard Deduction from $6,350 to $12,000 for single taxpayers, from $12,700 to $24,000 for married filing jointly and $9,350 to $18,000 for head of household;

Repeals the personal exemption for taxpayer and spouse (was $4,050 each);

Doubles the maximum child tax credit to $2,000;

Caps the State and Local Tax (SALT) deductions at $10,000, including property tax;

Increases the estate and gift tax exemption to $10,000,000 (almost twice the current amount);

Repeals the deduction for Moving expenses, except for members of the armed services;

Repeals the Obamacare individual mandate;

Changes withholding rates and tables – The new rates are: 10%, 12%, 22%, 24%, 32%, 35%, and 37% and provide tax breaks across the board compared to the old rates.

Starting in February of 2018, new payroll withholding rates will give all w2 employees a fatter paycheck.

Although these rates will sunset in a few years, they can be made permanent at any time by a majority vote of the House and Senate.

Tax Doctor will update you as changes get implemented. Remember, Tax Doctor does a free evaluation of your tax return(s) upon request. Our free look is free so it’s a win-win situation.

See you soon!

Steve Lombardo

TAX DOCTOR