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Tax Bill passes through Senate “BIG” changes coming “Contact your CPA by the end of the Year”

posted December 04, 2017

Here are a few highlights of the new tax plan:

  • The top individual rate is reduced from 39.6% to 38.5%, and the threshold at which the top rate kicks in is increased from $418,000 for a single/$480,000 for married filing jointly to $500,000/$1,000,000. Further down the brackets, rates are reduced as well.
  • The top rate on the income earned by owners of “flow through” businesses — S corporations and partnerships — is reduced from 39.6% to a shade below 30%.
  • The standard deduction is doubled from $6,350 for a single/ $12,700 if married to $12,000/$24,000.
  • Deductions for personal exemptions are repealed, but the child tax credit is increased from $1,000 to $2,000.
  • Many popular itemized deductions — state and local income taxes, casualty losses, and unreimbursed employee expenses, among others — are eliminated.
  • The estate tax exemption is doubled, to $11 million for a single taxpayer and $22 million for married taxpayers.
  • The alternative minimum tax remains intact, although with a higher exemption amount.
  • The corporate rate is reduced from 35% to 20%.
  • Businesses will be able to immediately expense many asset purchases; after five years of 100% expensing, the rate will phase out at 80%/60%/40%/20% rates over the ensuing four years.
  • The international tax regime is completely revamped, shifting from a deferral system to a territorial system.

All of the individual changes listed above, as well as the change in the estate tax, will expire on December 31, 2025 and reset to current law.

For more information go to www.thayeroneal.com or info@thayeroneal.com

 

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